Is Tesla Losing Its Pricing Power -- Or Proving Its Competitive Advantage?
The stock market proved its resilience on Friday morning, as an initial drop for the Nasdaq Composite (NASDAQINDEX: ^IXIC) and other major stock indexes after the release of discouraging bank earnings reports proved to be short-lived. By 10:45 a.m. ET, the Nasdaq was back to unchanged, regaining the 11,000 level and keeping some of its upward momentum from the beginning of the year.
However, shares of Tesla (NASDAQ: TSLA) were down sharply, opening lower by 6% before recovering to a 2% decline by mid-morning. The electric car maker has had a nice pop in its stock price to begin 2023, but its most recent business move has some investors wondering whether changing consumer demand trends could keep it from maintaining pricing discipline to maximize profits. Others, though, note that there are additional factors involved that could justify the moves.
The initial decline in Tesla stock came from reports that the automaker had reduced prices for its Model 3 and Model Y electric vehicles for buyers in the U.S. and Europe. News reports based on posted prices on Tesla's website noted declines of as much as 20% in some cases, with significant disparities in percentage reductions depending on the specific configuration and options chosen on each vehicle.
Source Fool.com
