Again, Don't Sweat Tesla's EV Price Cuts. Here's Why.
It happened again. After lowering the sticker price for several of the company's electric vehicles (EVs) -- including the highly affordable Model 3 -- back in January, earlier this week Tesla (NASDAQ: TSLA) pared back the prices of its more expensive EVs like the Model S and Model X. Depending on the vehicle in question, they're now between $5,000 and $10,000 less than they were just a few days ago.
The market is rattled, of course. After all, the move could be a sign that demand for electric vehicles is softening, or that competition is making a dent in Tesla's market share.
However, there's a critical detail mostly not being considered here: Tesla can afford to lower the sticker price of its electric vehicles. Its average production cost has been coming down for years now, and should continue to do so in a rather dramatic fashion.
Source Fool.com
