It’s just over a month since Tesla cut prices by up to £8000, officially because it had sourced better deals with suppliers, unofficially because it had for the first time in its frenzied history more supply than demand.
For owners who had only just taken delivery, it was a devastating financial blow. Calculations for the UK’s 16,568 customers last December suggest they collectively paid in the region of £100 million for the pleasure of up to a couple of weeks of ownership; an extrapolation of Tesla’s 405,278 sales in the final three months of last year would suggest that a collective £1.6 billion could have been saved by people waiting 90 days or so.
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Surely it must have been obvious to many industry analysts that a price drop was coming in the EV market. The component count and build costs are lower than ICE cars, apart from the battery the cars would be cheaper to make and everyone can see battery costs falling dramatically. the industry has been hiding behind the chip crisis for too long, and that itself will right itself with new capacity in multiple locations soon. Output will rise, unit costs will fall again and with that competitive pricing will resume. The players will not be the same, this world will not suit JLR and the like and will suit China's increasingly confident and competent producers. Musk himself must be at least considering an exit strategy or further expansion and consolidation. The driver for all this is a world need for non polluting, basic transport cars, and the world needs maybe a billion of them over the next 10 years. The big players have shot themselves in the foot by not gearing up to make them, instead looking only at short term profits and the 'affordable' £45,000 family car, like the Enyaq.
A cynical man might suggest that the chinese have sustained and strategised the chip crisis knowing that western policies would have driven producers exactly where they have. It would be a master stroke if so because it has given them the time, build capacity and crucial credibility building to fill the world gap themselves, allowing them to say they have saved the planet in this area at the same time.