Latest / Elon Musk Podcast / Elon Musk's Price War Strategy: A Brilliant Move or a Dangerous Gamble?

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Elon Musk's Price War Strategy: A Brilliant Move or a Dangerous Gamble? · Elon Musk Podcast

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  subscribing. Hello and welcome back to the
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  Elon Musk podcast. And on this episode, we're going
• 0:34
  to be talking about Elon Musk and Tesla.
• 0:38
  I'm your host will Weldon and we have a truly fascinating story.
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  Today that has the global automotive industry buzzing.
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  We're going to be taking a deep dive into Tesla's aggressive
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  price, cutting strategy, the brainchild of Elon Musk and his
• 0:50
  audacious bid to dominate. The industry is dividing
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  opinions drawing comparisons to the likes of Henry Ford and also
• 0:57
  to Steve Jobs. However some critics Asking if
• 1:00
  he's more akin to Rick Wagner. Who's Reggie, LED General Motors
• 1:04
  down a precarious path in the past and this episode will dis
• 1:08
  sect musk's latest strategic pivot, which could either
• 1:11
  revolutionize the industry or spark a crisis reminiscent of
• 1:15
  the one than a goal GM in 2009 will examine how the test, the
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  price cuts are creating shockwaves across the market,
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  the potential implications for competitors, and what it all
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  means, for the future of the EV industry, Elon Musk had a a
• 1:30
  Quest To Rule The Automotive world and his strategies are
• 1:34
  polarizing to say the least and some compare them to Henry Ford
• 1:39
  in the model Tiara While others like a name to Steve Jobs,
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  bringing about the iPhone Revolution.
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  But what if he's more like Rick Wagner, who led General Motors
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  to near destruction. Now, Tesla has numerous price
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  Cuts this year. Taking nearly a third off, the
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  cost of its top, selling us model have left industry
• 1:57
  insiders debating, whether this strategy is Evolutionary or
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  desperate Ford CEO, Jim Farley compared musk to for himself,
• 2:06
  citing the development of an Innovative product, efficient
• 2:09
  manufacturing and driving down costs as key.
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  Similarities. Now, the other hand musk is
• 2:14
  applying Silicon Valley tactics to the EV industry and attempt
• 2:18
  to outperform Rivals, like rivi and auto and Lucid Auto Group
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  Inc. Now, the cautionary example of
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  General Motors comes to mind is Wagner's Reliance on incentives.
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  After the September 11th Terror attacks, ultimately led to GM
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  and Chrysler bankruptcy in 2009. And while Ford narrowly avoided
• 2:38
  the same fate and Tesla's plans have been scrutinized before
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  with investors like Jim chanos David Einhorn Cathy wood and Ron
• 2:45
  Baron divided over the company survival in the growth.
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  Potential Tesla stock has surged more than 750 percent last.
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  Five years, proving doubters wrong and short Sellers as well
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  and musts latest strategic shift.
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  Dictate the future of an industry that Tesla has already
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  upended. In the past decade and as the
• 3:05
  pandemic disrupted auto supply and demand musk is betting, that
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  competitors will have no choice but to respond to his price
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  Cuts. Now, despite Rivals attempting
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  to weather the storm of Tesla's, price-cutting internal changes
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  within the company, suggests a shift in musk's approach.
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  Tesla's growth has been consistent with two new
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  factories opening of Germany and Texas.
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  Last year, roughly doubling potential output in Only 22.
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  However pestles lineup has an expanded as much with both new
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  plants, focusing on the successful model y SUV.
• 3:39
  And while the model why is demand has been impressive
• 3:42
  selling for over sixty five thousand dollars in the US last
• 3:45
  year. The model 3 sedan is in Greater
• 3:48
  need of a refresh, as it approaches its sixth
• 3:51
  anniversary. Without a major redesign in
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  update, though is reportedly due sometime later this year, to of
• 4:00
  World's top selling TVs or Tesla's.
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  The model y in the model 3 and they demonstrate the company's
• 4:04
  dominance. In this market, the only other
• 4:07
  vehicle near the top of the global sales.
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  Ranking is a four thousand five hundred dollar mini car produced
• 4:13
  by a joint venture between two Chinese manufacturers and GM.
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  Now Tesla's unmatched, economics of scale techniques to do that
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  into high-volume v's and production.
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  Allow it to reduce costs and vehicle prices now Rivals like
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  Vivian and Lucid as well as forward.
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  And other incumbents developing EV operations are far from
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  breaking. Even now, musk's price, cutting
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  strategy makes achieving sustainability even more
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  challenging for competitors, and it's battery costs have yet to
• 4:43
  reach, parity, with combustion engines GM, CEO, Mary Barra and
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  CFO. Paul Jacobson acknowledged, the
• 4:50
  need to lower costs in response to Teslas competitive results
• 4:54
  and margins. Now must remains bullish though.
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  Let me that test. Look at theoretically make no
• 5:00
  profit up front and still earn money from self-driving
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  software. This statement is met with
• 5:05
  skepticism is musk has a history of over selling Tesla's,
• 5:09
  autonomous driving capabilities and Tesla's cash cushion has
• 5:12
  grown as well, but the company's Automotive gross margin is
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  slipped to. Its lowest point in 11 Quarters
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  at just 19 percent. This could indicate the musk has
• 5:23
  less Choice into blending price, It's then he has led on to be
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  that would test the falling short of its growth objective.
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  Last year, increasing vehicle sales by 40% the company, set up
• 5:35
  production, Target for this year, roughly in line with that
• 5:38
  rate if not slower and even after musk's aggressive
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  discounting in the first quarter, deliveries increased 37
• 5:45
  percent from a year earlier. Tesla's, declining Automotive,
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  gross margin has become a focal point for investors.
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  The company removed, any mention of this margin from its earning
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  deck, Fortune analyst to calculate the figures
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  themselves. Tesla has had mixed success with
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  redesigns. In the past updates to the model
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  S sedan, and the model X SUV. Two years ago were minimal in
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  these vehicles are now showing their age, Tesla delivered just
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  ten thousand. Six hundred ninety, five
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  combined units in the first quarter despite It must cutting
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  prices and average of almost twenty three thousand dollars a
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  piece. Now, Tesla, Mark the acid X down
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  further, in the first week of this month, then change Tech
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  bumping prices back up a bit. One day after those earnings
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  came out. Now, CEO of Ford Farley's
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  comparison of musk to Henry, Ford is largely positive, but he
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  did allude to one key lesson. Ford learned after his
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  reluctance, to replace the Model, T, allow GM and others to
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  catch up. And as Tesla faces a turning
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  point, the company's aggressive price cutting strategy.
• 6:53
  May prove to be a game-changer or we could serve as a
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  cautionary tale for the future of the automotive industry.
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  Tesla's bold moves, have the potential to revolutionize the
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  market for vehicles and they also carry significant risks and
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  have competitors failed to adapt.
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  Tesla May emerge as the dominant force in the industry.
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  However, if the company's price-cutting strategy backfires
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  or proves unsustainable, it could lead to a Crisis similar
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  to the one faced by General Motors in 2009.
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  And as the EV Market continues to evolve all eyes will be on
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  Tesla and Elon Musk with the company's Gamble's with price
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  cutting and price bumping will they pay off and Propel.
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  Everything it to unprecedented Heights or will history repeat
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  itself and test. The find itself in a precarious
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  position like GM in the past and only time will tell the outcome
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  of this high-stakes game. The automotive industry.
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