Tesla Price Cuts Take a Huge Bite From Profits: Brilliant Move or Warning Sign?

By Jason Hall and Jeff Santoro – Oct 29, 2023 at 5:02AM

NASDAQ: TSLA

Tesla

Market Cap

$574B

Today's Change

(-3.48%) -$6.49

Current Price

$180.11

Price as of May 22, 2024, 4:00 p.m. ET

Cost advantages are a great tool, but near-term weakness could hit Tesla harder than most.

Tesla (TSLA -3.48%) has slashed its car prices, sending its margins and profits down sharply. In this video, Motley Fool contributors Jason Hall and Jeff Santoro break down how this strategy could be a great way to take market share, but it could also be a sign of trouble brewing, based on what we are hearing from other automakers, including legacy giants General Motors (GM -2.12%) and Ford (F -0.99%), along with weakening demand at EV startups Lucid Group (LCID 1.76%) and Rivian (RIVN 6.47%).

*Stock prices used were from the afternoon of Oct. 25, 2023. The video was published on Oct. 29, 2023.

Jason Hall has no position in any of the stocks mentioned. Jeff Santoro has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy. Jason Hall is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool