Most Likely, Tesla Is Not Cutting Prices As Has Been Reported

Tesla Price Cuts Not Happening

There are new reports that Tesla is going to cut prices of the Model 3 and Model Y in Hong Kong, and we think that these reports are not true. Tesla does not announce they will cut prices - they instead just cut prices when they feel it necessary.

The latest news comes from multiple sources, and unless someone has privileged insider information, then I don't think these price cuts are going to happen.

Tesla has cut prices quite a number of times this year already on all its vehicles, and the Model 3 is only $5,000 away from its original starting price of $35,000 for the RWD standard range version.

The Model Y saw the largest price drop, by over $15,000 this year, and is the world's best-selling vehicle.

Elon Musk has said that in a difficult environment economically, that he would be willing just to break even in order to sell every Tesla vehicle made.

With Tesla's bet on FSD and autonomy, it makes sense for them to make sure every vehicle made is delivered to a customer.

Will Any Price Cuts Ever Happen Again?

This leads us to the most important question here. Will Tesla ever cut prices again?

I think this question is a good one, and I think that over the next year or so, Tesla will not cut prices. I think in another couple years that Tesla will actually raise prices.

The reason Tesla will raise prices is that interest rates will have to come down and when they do, there will be more room to raise prices.

There is a reason Elon Musk talks about interest rates so much. Interest rates run the economy for loans on cars, houses, or anything that someone cannot afford to pay for all at once.

Look for price increases in the future and not price raises.

However, also realize that when Tesla releases their compact versions of the Model 3 and Model Y, that those vehicles will cost around $20,000 to $25,000 and that is also a price reduction for a Tesla vehicle and a big one.

What do you think - will Tesla actually lower prices as has been reported, or will they keep prices where they are?

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News. Image Credit, Emmet Peppers, Screenshot