The price declines were inevitable. Demand was an issue in multiple markets. Macros cannot be ignored. However…
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The USD has weakened about 5% since peak late last year. Will probably continue to grind down. Exchange rates were a head wind all of last year for earnings, but are in Tesla’s favor now. Those 7 to 10% price decreases seem negligible between the USD weakening and costs decreasing while volume also ramps. It is not hard to get to a point where it is a wash if sales continue to increase 30% (or more) a year.
The big question is what happens in the US? What is the plan here? Obviously price decreases here affect margins directly as currency rates do not matter. Cost cutting, decreasing commodity prices and volume ramps can improve the margins in USA. The IRA certainly matters, especially if energy storage really is ramping. With the IRA and decreasing COGs and higher volumes, earnings should be very good.
Money is nice, but the ultimate goal is the relentless transformation of the ICE industry to BEV and a renewable world. We have been all admiring how well positioned Tesla was to crush the competition in hard times. Well, they are here and Tesla is executing the crush. It is not without side effects. It could never be any other way.