$Tesla(TSLA.US) ‘s new more affordable M-3 and M-Y are unlikely to move the needle on TSLA sales, since at $36,990 and $39,990 respectively, they are priced higher than the premium versions before Sept 30 including the $7,500 EV credit. All the talk by TSLA social media influencers about 10-15% higher TAMs is pure nonsense, since these vehicles are not new form factors or new models that expand TAM in any sense; they are cheaper trims of the existing models with big sacrifices to range, performance, exterior aesthetics, and interior features (no glass sunroof, no rear display, cloth seats, no AM/FM radio, no ambient lighting, cheaper sound system). TSLA’s competition has already preempted these lower-priced TSLA trims by cutting EV prices on existing models aggressively after the EV credit expired.
TSLA’s launch of the more affordable vehicles yesterday reflects a continuing tin ear toward consumer behavior and what new car buyers want. The new M-3 and M-Y trims will surely face more price cuts in the weeks and months ahead, or they will quietly be discontinued as the Cybertruck base RWD model was in September after just five months on the market. This becomes a self-fulfilling prophecy as new car buyers wait for these expected price cuts. Either way, TSLA’s new more affordable trims announced yesterday are likely to become even more affordable.The copyright of this article belongs to the original author/organization.
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