2022 saw Tesla Inc. (NASDAQ: TSLA) fall from its glorious highs into the humble territory. Owing to its severe shedding of market cap, the EV maker no longer ranks among the top ten companies in the world. Recently, it has been moving towards a different strategy to maintain its dominant market position.
Tesla Slashing Prices in the US
Tesla Inc. (TSLA) recently announced that it will be cutting down the prices of its vehicles sold in the US by 20%, putting its Model Y below $53,000. Investors have been discussing this shift across the markets, as it has two direct implications for the future of Tesla. Firstly, it qualifies that company for a $7,500 tax credit, under recent US regulations, which aim to bring electric cars into the mainstream, and within the affordability ranges of the masses. Secondly, the move also shows Tesla attempting to make a pivot towards a strategy that puts its sales volume above profit margins.
TSLA Part of Wider EV Rally
Throughout this week, the wider market has evidently remained largely optimistic with Tesla, as has been indicated in its price trend. On Monday, TSLA stock saw a single-day gain of 7.55%, which was part of a wider rally involving top EV players. Many in the market have commented that this bullish action comes as China begins reopening factories operating within the country. Similarly, there has also been a positive mood towards inflation, with the latest data, as investors feel the interest rate hikes have yielded effective results against the inflationary climate impacting the wider economy.
Conclusion
TSLA stock has had a rough year, most likely due to the fact that its previous highs reflected over-inflated trade multiples. The tumultuous 2022, with all its supply challenges and macroeconomic constraints, brought the stock crashing down in correction. Its recent pivot to prioritize volume over sales may be a rescue option to consider.
