For many years, Tesla has been doing incredibly well sales-wise. However, recent increases in the availability of electric vehicle models are proving to be a barrier to the company’s sales. Also, the fact that second-hand prices are falling (as supply issues are starting to get addressed) means that brand-new car prices also need to fall, and if they don’t, the difference between new and used will be way too large. This, paired with a decrease in sales and even recall issues has led to some big price cuts on new Teslas which suggest that the company might be a bit desperate to sell these models. Here's why the Model X might be dying and how Tesla is planning to save it.
Why Are Tesla Model X's Sales Falling?
Sales for the Model X (and Model S) aren’t looking all that good lately. The car market shows a big lack of interest in the Model X and this could be due to a variety of reasons. First and foremost, electric vehicle demand in general seems to be decreasing. This is happening due to a variety of reasons and one of them may be the fact that such vehicles are too expensive for the middle class. As you can imagine, most vehicle sales depend on the middle class and if EVs are priced beyond the means of these people then sales won’t be enough. This, however, may not be the only issue. There are currently many uncertainties in our world. Inflation and increasing interest rates may slow down sales of EVs as loans have high-interest rates and even second-hand resale values are uncertain.
Finally, people may have started to realize that electric vehicles aren’t significantly friendlier towards the environment. In fact, some of them can be even more damaging. The batteries and motors of EVs require precious metals that can only be found in certain parts of the world. This means that huge mining operations are necessary for those metals to be extracted from the earth. Now, in most cases, those metals then need to be shipped halfway across the earth in ships that will take them to the factories that build these motors and batteries. So, precious materials have been mined and shipped across the world before the production of the actual vehicle has started. Yes, they clean the air we breathe. But the statement of “saving our planet” may not be true.
Tesla Faces Even More Problems
Another recent event that isn’t helping Tesla sales is the fact that the Model X has had some recall issues lately which decreases people’s trust in the brand. The recall revolved around seat belt failures which could be deemed dangerous. This is certainly not a good image for a car that can cost upwards of $100,000. Also, the electric vehicle market has recently been filled with new models. The amount of new electric vehicles that have hit the market is simply astonishing. We now have everything from electric pickup trucks to sports cars, supercars, SUVs, and everything in between. This means that conventional manufacturers have also joined the game and are able to pump out electric cars at lower prices. Remember, there used to be a time when, in order to purchase an electric vehicle, you needed to invest a big sum of money. Since EVs are getting increasingly more popular, this is no longer the case.
What Is Tesla Doing To Combat This Decrease In Sales?
Well, as you may have already seen, Tesla has turned to price cuts of up to nine-percent for a brand-new Model X. This is done to spark interest in the vehicle again. In our current economy, the prices of high-end Teslas might be unjustifiable. Remember, there are now endless choices for EV vehicles on the market. Tesla is no longer alone. However, price cuts are not the only trick Tesla is using. A free supercharging package with 10,000 miles of free electricity has been announced. This will surely sway the buying behavior of anyone looking for an EV as free supercharging can significantly decrease the costs of ownership. These changes seem to have increased sales by a bit; however, the numbers are still low.
The Model X And Model S Might Be Heading Towards The White Light
The problem here might not actually be the vehicles themselves,but the fact that their price difference does not provide significant benefits over cheaper electric vehicles. Nowadays, even the Model 3 has Autopilot and a very respectable range and power figures. Sure, the Model X and S are faster, have more range, and can charge quicker but are those numbers really worth it anymore? The numbers of the Model 3 and Y are already good enough; therefore, paying the price premium for the more expensive models used to be worth it, but can’t be justified anymore. The above is even more clear if you have a look at Model 3 and Y sales. These vehicles still sell in good numbers which prove that even though the demand for EVs may be decreasing, more affordable vehicles are still selling. So, for the Model Y and X to live on, Tesla needs a revolution. It needs features that other vehicles do not have while also serving a purpose people never knew they needed to serve. This is the only way one could justify the huge price difference.