Tesla Launches 'The Great EV Deflation' and Morgan Stanley is Bullish on the Automaker
Tesla is known for pushing the boundaries of innovation and shaking up the status quo in the automotive industry. The company's latest move, a significant cut in prices for its electric vehicles (EVs), is no exception. According to Morgan Stanley, these price cuts have led to what the firm's analysts are calling the "Great EV Deflation."
This is a game-changer for the industry. Never before has a car company cut prices by 13-20% on the vast majority of its product range at one time. Morgan Stanley surveyed several dealers and automotive experts to see if they had ever seen this before, and not one of them could remember a single precedent. This is a clear indication that Tesla's move is unprecedented and could signal a shift in the industry towards more affordable electric vehicles.
This is great news for consumers as it means that EVs are becoming more accessible and affordable. It's no secret that one of the biggest barriers to EV adoption has been the higher cost compared to gas cars. With Tesla's price cuts, that barrier is being lowered, and more people can now consider an EV as their next car purchase.
But the impact of the "Great EV Deflation" extends beyond just people who buy Tesla. It could also lead to a decrease in battery costs, which would further reduce the cost of EVs. This could lead to more widespread adoption of EVs, which would benefit not just Tesla, but the entire industry.
In light of these developments, it's no surprise that Morgan Stanley has confirmed its Outperform rating and $220 price target on Tesla. The firm believes that the recent price cuts will help Tesla increase its market share in the EV market and drive down the cost of EVs.
While some investors may be concerned that Tesla's price cut move may upset customers who recently paid much higher prices for the exact same car, Morgan Stanley has addressed this issue in their report. The firm's analysts recall that 110 years ago, Henry Ford introduced the Model T “Runabout” and reinvented mass production, which led to a sharp decrease in car prices. This move revolutionized the automotive industry and made cars more affordable for the masses.
Similarly, Tesla's recent price cuts could be seen as a move to revolutionize the EV industry and make electric cars more accessible to a wider range of consumers. While some recent buyers may feel disappointed, the overall impact of these price cuts could be positive for the industry and for consumers in the long run.
Moreover, Tesla has a reputation for being customer-centric and has a history of offering generous discounts and incentives to its customers. It's possible that the company has a plan in place to address any potential dissatisfaction among recent buyers.
So, Morgan Stanley believes that Tesla's recent price cut move is a long-term strategy to revolutionize the EV industry and make electric cars more accessible to a wider range of consumers, similar to how Henry Ford's mass production led to a sharp decrease in car prices 110 years ago. While some recent buyers may feel disappointed, the overall impact of these price cuts could be positive for the industry and for consumers in the long run.
In their report, Morgan Stanley's analysts noted that nothing like the innovation that Henry Ford brought to manufacturing has yet to happen in the electric vehicle industry, particularly at Tesla. They wrote that we are only in the early days of Tesla's price cuts, and this is the beginning of when changes in design, manufacturing technology, and scale will lead to a deep deflation in the price of electric vehicles.
“While it's still early days following the Tesla price cuts, we believe history will reflect upon this time as the moment when changes in design, manufacturing technology, and scale enabled profound deflation in the price of EVs. Potential changes to industry composition and market share may take years to play out. But we believe the EV forecasts and manufacturing plans of competing EV players (startup and legacy) may potentially need to be fundamentally reconceived,” Morgan Stanley said.
This statement highlights the significance of Tesla's recent price cut move and how it could potentially lead to a major shift in the EV industry. As Tesla continues to innovate in design and manufacturing technology, they could potentially drive down the price of electric vehicles and make them more accessible to a wider range of consumers.
Furthermore, Morgan Stanley believes that Tesla's move could force other EV manufacturers to reconsider their forecasts and manufacturing plans. This could lead to a shakeup in the industry and potentially change the competitive landscape in the EV market.
In conclusion, Morgan Stanley believes that Tesla's recent price cut move is a significant step towards bringing about a "Great EV Deflation" and could lead to a major shift in the EV industry as Tesla continues to innovate in design and manufacturing technology, potentially driving down the price of electric vehicles and making them more accessible to a wider range of consumers.
Tesla's latest move to cut prices on its EVs is a bold and game-changing move that could lead to the "Great EV Deflation" and the beginning of the end for gas cars. It's a win for consumers and the industry as a whole.
This price slashing strategy is sure to revolutionize the electric vehicle industry, and Tesla is leading the charge. As investors and automotive enthusiasts alike watch closely to see what Tesla does next, it is clear that the 'Great EV Deflation' is here to stay.
What do you think about Tesla's effect in the automotive industry after these recent price cuts?
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.