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Tesla Quietly Made a Game-Changing Shift in Production and Delivery

With Tesla vehicles' current price cuts and slight price increases I think something very important is happening, which is very important to note.

What's happening behind Tesla's price cuts and price increases is big and not many people talk about it. I didn't see it either, until one of our viewers on our Torque News Youtube channel mentioned in a comment. Tesla is making a big normalization of its production and delivery process using the price elasticity concept.

John Blaha says, Armen, Tesla normalized its production and delivery process away from the quarterly rush. Now it is adjusting the price system in a response to the demand on a regular basis measured by the order backlog. Car dealers operate normally this way and Tesla deals directly with customers. Normal economic business practice just looks different here.

I think this is a very interesting and true thought, and thanks for this explanation John, on Tesla's adjustment of the pricing system. I appreciate the insight into how normal economic business practices differ with Tesla's direct-to-consumer approach. It's interesting to see how Tesla has normalized its production and delivery process, away from the quarterly rush, to respond to demand on a regular basis as measured by the order backlog. Do you remember that normally about a year or so ago toward the end of each quarter Tesla CEO Elon Musk would send a memo urging the staff to push the sales and deliveries. Now, it looks like Tesla has normalized this process.

I understand that car dealers typically operate in a similar manner and adjust prices based on demand. It's great to see Tesla adapting this method in its business model. Also, note how Tesla plays with the Model Y prices to qualify the vehicle for the IRA tax credit.

I am going to keep an eye on how Tesla keeps adjusting its prices to further streamline its production and delivery process. Also, we will see how this will impact the customers who have already placed their orders.

Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded 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.