The Revolutionary Tesla Cybertruck: Elon Musk’s Electrifying Showcase in Austin

In a captivating and meticulously orchestrated event at Tesla’s state-of-the-art headquarters in Austin, Texas, CEO Elon Musk took center stage to passionately introduce the highly anticipated and groundbreaking Cybertruck. Musk’s visionary unveiling promised not just a new vehicle but a radical departure from conventional automotive design, setting the stage for a seismic shift in the industry.

Elon Musk’s Visionary Claims:

Elon Musk, a charismatic entrepreneur known for his audacious proclamations, confidently asserted that the Cybertruck transcends the traditional confines of a pickup truck, emerging as a superior entity that seamlessly combines the robust functionality of a truck with the exhilarating performance of a sports car. The event unfolded in a dimly lit space, deliberately chosen to create an atmosphere of intrigue, underscoring Musk’s grand revelations.

Features That Redefine Toughness:

As Musk delved into the details, he fervently highlighted the Cybertruck’s unparalleled toughness. The vehicle boasts a bulletproof hard steel body and windows that Musk boldly claimed to be “rock-proof.” Its remarkable towing capacity, exceeding 11,000 pounds, positions the Cybertruck as a powerhouse in the electric vehicle (EV) landscape. Accelerating from 0 to 60 mph in a mere 2.6 seconds, coupled with a “super-tough” composite bed measuring six feet long and four feet wide, the Cybertruck exudes a rugged and cutting-edge appeal.

Changing the Roadscape:

Musk, with his characteristic enthusiasm, painted a vivid picture of the future, asserting that the Cybertruck would not merely traverse roads but fundamentally alter their appearance. This bold proclamation implies a departure from the mundane, signaling a shift towards a futuristic aesthetic that aligns with our long-held sci-fi imaginings.

Pricing Uncertainties:

Intriguingly, Musk chose not to delve into specific pricing and battery range details during the event, keeping the audience in suspense. Subsequently, Tesla’s website revealed a rear-wheel drive base model priced around $60,990, a figure significantly higher than the initially targeted $40,000, even before factoring in potential tax breaks or incentives.

Production Challenges and Cautionary Notes:

As Musk presented the first batch of “production Cybertrucks” to an ecstatic audience, he candidly acknowledged the formidable challenges ahead. This admission echoed a more cautious tone expressed in an earlier earnings call, where he highlighted the complexities of achieving volume production and ensuring the Cybertruck’s financial viability.

Tesla’s Forward Plans with the Cybertruck:

Tesla’s website divulges comprehensive plans, outlining various trims for the Cybertruck. These include a base model rear-wheel drive priced at $60,990, a high-performance “Cyberbeast” version at $99,990, and an all-wheel drive variant at $79,900, slated for release in 2025. The projected ranges and acceleration details vary across these distinctive trims, offering consumers a spectrum of options.

Market Dynamics:

Despite Tesla’s ambitious projections, the electric pickup market has experienced a more measured growth compared to initial expectations. Established competitors such as Ford, General Motors, and Rivian have entered the EV arena, each presenting its unique approach to electric pickups, intensifying competition within the sector.

Reservation Buzz and Production Timeline:

Tesla generated unprecedented anticipation by accepting over a million reservations after unveiling the Cybertruck in November 2019. However, the transition from anticipation to reality commenced in July 2023, when Tesla initiated early Cybertruck production. Presently, customers are required to place a $250 deposit to progress with their Cybertruck orders, marking a tangible step toward fulfilling the immense interest generated by the vehicle.


As Tesla navigates the ever-evolving landscape of electric pickups, the Cybertruck stands not only as a cutting-edge vehicle but as a symbol of innovation and resilience within the automotive industry. Elon Musk’s electrifying showcase in Austin marks a pivotal moment, not merely in Tesla’s journey, but in the ongoing transformation of the automotive landscape.

Exploring the Affordability of Tesla: A Comprehensive Analysis

In the contemporary automotive landscape, Tesla has unquestionably emerged as a dominant force, renowned for its elegant electric vehicles and pioneering technological innovations. What makes Tesla stand out, aside from its groundbreaking technology, is its remarkable ability to provide competitive pricing, making electric vehicles accessible to a broader demographic. This article will delve into the multifaceted reasons behind Tesla’s affordability, shedding light on the intricate mechanisms that enable them to offer such cost-effective options.

Production Efficiency: The Driving Force Behind Affordable Teslas

One of the primary pillars supporting Tesla’s affordability is its relentless pursuit of production efficiency. Over the years, Tesla has made remarkable strides in streamlining its manufacturing processes. A pivotal element in this pursuit is the establishment of Gigafactories, colossal manufacturing facilities that capitalize on economies of scale to reduce operational costs. By achieving a high volume of vehicle production, Tesla can negotiate favorable terms with suppliers, which, in turn, significantly lowers the overall cost of production.

Battery Technology: The Powerhouse of Affordability

Tesla’s profound expertise in battery technology stands as a testament to their cost-efficiency. The company has invested substantially in research and development, concentrating on enhancing battery efficiency and reducing costs. A distinguishing feature is Tesla’s decision to develop its battery cells and packs in-house, effectively eliminating reliance on third-party suppliers. This strategic move results in substantial cost savings, a benefit that ultimately trickles down to the end consumer.

Vertical Integration: A Pinnacle of Control

Unlike traditional automakers, Tesla embraces the concept of vertical integration, a strategy that significantly contributes to maintaining competitive pricing. Tesla’s capability to design and manufacture a multitude of vehicle components in-house offers unparalleled control over the production process. This autonomy effectively reduces dependence on external suppliers, culminating in substantial cost reductions and an attractive price tag for consumers.

Economies of Scope: The Synergy Advantage

Tesla’s diversified product lineup, encompassing electric cars, energy storage solutions, and solar panels, unlocks the door to economies of scope. This strategic move allows Tesla to leverage shared resources and technologies across various product lines, effectively spreading out costs and enhancing operational efficiency. As a result, consumers can benefit from more affordable prices, showcasing Tesla’s commitment to accessibility.

Are Tesla’s electric vehicles more affordable than those of other manufacturers?

Yes, Tesla’s electric vehicles are frequently priced competitively when compared to other manufacturers in the electric vehicle industry.

Are Tesla’s electric vehicles more affordable than traditional gasoline-powered cars?

Although some gasoline-powered cars may have a lower upfront cost, Tesla’s electric vehicles offer significant long-term savings in terms of fuel and maintenance expenses.

Can we anticipate a further reduction in Tesla’s prices in the future?

Given Tesla’s consistent track record of enhancing production efficiency and advancing battery technology, it is highly likely that their prices will continue to decrease as they expand their operations and achieve further cost reductions.

Tesla’s Path to Affordable Excellence

In summary, Tesla’s ability to deliver affordable pricing is underpinned by its unwavering commitment to production efficiency, groundbreaking battery technology advancements, an exceptional focus on vertical integration, and the strategic exploitation of economies of scope. By harnessing these pivotal factors, Tesla has successfully positioned itself as a frontrunner in the electric vehicle market, simultaneously making its products accessible to a broader and more diverse consumer base.

Tesla’s Dojo Supercomputer and Its Potential to Transform Market Value

Morgan Stanley’s Optimistic Projection

In a recent analysis, Morgan Stanley’s team, led by renowned Tesla analyst Adam Jonas, made a noteworthy prediction regarding Tesla’s future market value. The analysts postulated that Tesla’s Dojo supercomputer could be the catalyst for a staggering $500 billion surge in the electric vehicle manufacturer’s market worth. This forecast has ignited considerable excitement within the investment community and the tech world at large.

Market Response to the Projections

The market responded swiftly to this optimistic outlook, with Tesla’s stock price surging by more than 6% during early trading on a Monday morning. Investors and industry observers were quick to react to Morgan Stanley’s positive assessment of Tesla’s supercomputing endeavors. This surge in stock price reflects not only market optimism but also the acknowledgment of Tesla’s role as a technological innovator.

Dojo’s Potential Revenue Streams

Morgan Stanley’s analysts underscored that this substantial increase in value could be attributed to Dojo’s potential to unlock fresh revenue streams. These revenue streams may emerge through the broader adoption of robotaxis and software services within Tesla’s ecosystem. The prospect of these new income sources adds depth to Tesla’s already diverse revenue streams, which encompass vehicle sales, energy products, and software services.

Parallels with Amazon Web Services

Drawing parallels with Amazon Web Services, the analysts likened Dojo’s potential impact at Tesla to the transformative forces that have propelled Amazon’s profitability to unprecedented heights. This analogy not only highlights the scale of Dojo’s potential but also underscores the seismic shifts occurring in the automotive industry, where technology and innovation increasingly drive value creation.

Tesla’s Identity as an Auto-Tech Hybrid

The analysts touched upon the ongoing debate about Tesla’s identity as either an automobile company or a technology company. Their perspective is that Tesla is both, but they emphasize that the most significant driver of value in the future will likely be software and services revenue. This dual identity positions Tesla uniquely, allowing it to leverage the strengths of both industries for sustained growth.

Dojo’s Role in Advancing Tesla’s Goals

Dojo, an in-house supercomputer with a five-year development history, plays a pivotal role in training AI systems. Its responsibilities encompass tasks such as supporting Tesla’s driver-assistance system, Autopilot, and contributing to the realization of Tesla’s ambitious “Full Self-Driving” initiatives. The continuous development of Dojo aligns with Tesla’s commitment to pushing the boundaries of autonomous driving technology.

Expanding Addressable Markets

Morgan Stanley’s analysis also highlights Dojo’s potential to expand Tesla’s addressable markets significantly. This expansion goes beyond the conventional sale of vehicles at fixed prices. By delving into robotaxis and software services, Tesla can tap into new demographics and markets, making its offerings more accessible and adaptable to a changing transportation landscape.

Key Events on the Horizon

Looking ahead, the analysts spotlight two key events: the anticipated unveiling of Tesla’s latest version of its full self-driving system by year-end and the expectation of Tesla’s next AI day in early 2024, although the latter event is yet to be officially announced. These upcoming milestones provide a glimpse into Tesla’s roadmap for technology innovation, and they are eagerly anticipated by stakeholders and industry enthusiasts alike.

Stock Performance and Market Cap

While Tesla’s stock has doubled in value since the beginning of the year, it remains below the all-time intraday high of $414.50 reached in November 2021. Currently, the world’s most valuable automaker boasts a market capitalization of approximately $788.74 billion, as of the market close on the previous Friday. This figure underscores Tesla’s prominent position in the global market and its potential for further growth.

Tesla price war leads to Chinese EV makers losing profits

Tesla — On Thursday, Tesla received some good news as shares in the company’s Chinese rivals dropped.

Xpeng declined by 8% in Hong Kong, while Nio also fell by 5.6%.

Two others, Li Auto and Leapmotor, also dropped by 4.2% and by 2.4%, respectively.

Additionally, BYD, the world’s largest plug-in hybrid EVs and battery EVs seller, also witnessed a 1% plunge in Hong Kong.

Meanwhile, its Shenzhen-listed stock reported a bigger loss of 2.3%.


The drop in shares came after Tesla CEO Elon Musk revealed the company would continue cutting prices.

The decision is meant to boost demand for electric cars as the market grows increasingly competitive.

During an earnings call with analysts on Wednesday, Musk released a statement, saying:

“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin.”

“We do believe… that it’s better to ship a large number of cars at a lower margin, and subsequently, harvest that margin in the future as we perfect autonomy.

Price cuts

In October, Tesla started cutting prices in China, which is home to the world’s largest EV market.

The price cut decision came after losing market share to competitors like the Warren Buffet-backed BYD.

Another price cut came in January 2023 for Tesla’s China-made Model 3 and Model Y.

The slashed prices extended across markets worldwide to bolster demand while challenges from other EV makers increased.

For example, the United States witnessed Tesla reducing its prices for the sixth time in 2023 ahead of its first-quarter earnings.


According to data from the China Passenger Car Association, sales of Tesla’s China-made cars increased by 10% from the same period in January compared to 2022.

Meanwhile, most of the Chinese rivals posted steep declines in sales.

Leapmotor and Xpeng’s January sales took a massive hit, plunging by 86% and 60%, respectively.

Furthermore, Tesla’s decision to slash prices prompted a price war in China.

After Elon Musk’s company made the first move, several Chinese car manufacturers followed a similar path.

Companies started cutting their prices or offered discounts, including:

  • Xpeng
  • Leapmotor
  • BYD
  • Huawei’s EV unit

In February, a Huawei EV salesperson spoke with state-owned Economic Observer, saying:

“Tesla has cut prices a lot. If we don’t cut prices, we really can’t survive.”

According to recent data from the CCPA, Tesla’s sales of China-made vehicles went up by 35% in March, leading to more than 88,000 units.

However, it still fell behind BYD, as the company sold more than 100,000 pure battery EVs.

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The price wars

Tesla’s decision to cut prices created a domino effect that led to a price war and an impact on the company’s sales and profits.

So far in April, the company earned $2.9 billion, which, excluding special items, is down by 22% from 2022.

The lower prices also prompted revenue to a drop of $1.3 billion compared to the fourth quarter, even with record deliveries.

As a result, the company is faced with tighter profit margins.

Other companies like Ford have also cut prices, especially for its key EV, the Mustang Mach-E.

Over the call with investors, CEO Elon Musk said the company is facing headwinds from broader economic conditions.

“It is worth pointing out that the current macro environment remains uncertain,” said Musk.

“I think people already know [that], especially with large purchases such as cars.”


On Thursday, shares of European car makers also took a hit as people grew concerned about pricing pressure.

French company Renault dropped by 6.5% despite the company reporting strong sales and higher prices over the first quarter.

Stellantis, the group that came from a merger between Fiat Chrysler and PSA Group dropped by 4.8%.

Mercedes-Benz Group and BMW fell around 2.8%.

Meanwhile, Volkswagen, Europe’s most successful car maker, took a hit of 1.9%.

Tesla recalls models, safety concerns raised

Tesla Users have always found the idea of having a car drive itself to be enticing, especially in situations when there is traffic or a distance to travel.

Even though it was originally only a vision, Elon Musk and his automaker Tesla were able to make it a reality.

The response has been uneven since the inclusion of the “Full Self Driving” aid software.

Due to its self-driving capability, Tesla had to recall a handful of cars last year.

This year, the firm plans to recall even more cars.

The news

There are reports that Tesla is recalling all 363,000 “Full Self Driving”-equipped cars in the US.

The corporation cited safety concerns as the reason for their choice, which will be another blow to Tesla’s key differentiator.

The autonomous driving function uses artificial intelligence (AI) to steer, brake, and accelerate the car while it travels through local roadways.

Because of the system’s propensity for making poor judgment calls, it also necessitates having a human driver ready to take over at any time.

The problem

The National Highway Traffic Safety Administration has determined that Tesla’s FSD function has resulted in an unreasonably high danger to motor vehicle safety due to a lack of dedication to traffic safety.

The agency issued a warning that FSD could have the ability to transgress traffic regulations at crossings before motorists can react.

Recently, the NHTSA announced a recall on its website, stating:

“The FSD Beta system may allow the vehicle to act unsafe around intersections, such as traveling straight through an intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution.”

Fixing the system

The FSD function would be fixed by Tesla via an over-the-air software update, which would cost them $15,000, according to the NHTSA notice.

Elon Musk, the CEO, has not yet issued a public remark on the matter.

He has only used the word “recall” in his tweets thus far, claiming it is incorrect and out-of-date to refer to an over-the-air software update.

Yet according to the NHTSA statement, manufacturers are required to start a recall for fixes that reduce an unreasonably high risk to safety, including software upgrades.

The government authorities claim they continue to assess the efficacy of recall solutions.

Read also: Ford halts pickup truck EV production, battery fire creates issue

Affected models

The issues are evident in vehicles using the most recent FSD software version, according to the notice.

The software is used by the following four Tesla models:

  • Model S
  • Model X
  • Model 3
  • Model Y

The notification also claimed the corporation detected 18 reports of events between May 8, 2019, and September 12, 2022, which might be tied to similar situations.

The NHTSA stated Tesla is unaware of injuries or deaths in the reported occurrences.

The Tesla driver assistant system was involved in 273 crashes, according to the government authorities.

Safety data

Due to the premiums consumers pay for its amenities and its ability to entice purchasers with its automobiles, Tesla views FSD as the foundation of the business strategy for the firm.

Although being in beta, Elon Musk and the business have insisted that the FSD is safer than manual automobiles.

Musk informed investors in January that the business gathered information from drivers who used FSD outside of highways for more than 100 million miles.

“Our published data shows that improvement in safety,” said the CEO. 

“It’s very clear. So we would not have released the FSD Beta if the safety statistics were not excellent.”

Tesla’s claims about safety, however, are disputed by safety professionals.

High-profile incidents involving Tesla vehicles equipped with FSD and its predecessor, the “Autopilot,” have occurred.

Deaths have resulted in some incidents.

The NHTSA is also looking into Autopilot.

Instead of the “full self-driving” idea, the system combines adaptive cruise control and lane-keeping assist to maintain the automobile in its lane.

Tesla aspires to create an AI that can drive a car autonomously in the future.

Although the recall is intended to address a particular set of issues, it excludes preliminary investigations.

“Accordingly, the agency’s investigation into Tesla’s Autopilot and associated vehicle system remains open and active,” said its statement.

According to Tesla’s annual financial report, the US Justice Department requested records related to the company’s Autopilot and FSD technologies in January.


Ford halts pickup truck EV production, battery fire creates issue

Ford Across a broad spectrum of industries, the United States is home to several large firms that export their goods and services around the world.

Gas-powered automobiles formerly plied the concrete roads until Elon Musk and Tesla introduced a new age of electric vehicles.

With a history spanning more than a century, Ford Motor Company is one of the top American automakers.

The business has prospered despite the economic downturn, frequently returning to the market with a new product.

Ford made the decision to adjust in light of the advent of electric vehicles and unveiled plans for many new models.

The Ford F-150 Lightning pickup truck is one of the most eagerly awaited vehicles.

Unfortunately, a recent problem has forced the business to stop manufacturing for now.

The news

Ford Motor Company stated on Wednesday that it anticipates manufacturing of the F-150 Lightning pickup to stall until the end of the next week.

The business will solve a potential battery problem at around that time after a car’s battery caught fire.

One day after the company declared at the beginning of last week that the much-anticipated car would be suspended, the fire was officially verified.

Ford opined on Wednesday that the fire’s origin had been discovered by engineers.

The inquiry should be finished by the end of the next week.

After that, the business will make modifications to the truck’s battery manufacturing process, which might take weeks.

The fire

The battery fire was initially reported by the Detroit Free Press.

According to the report, it happened during a holding lot quality check before delivery.

A neighboring car was then affected by the fire.

Ford acknowledged it, but a spokeswoman for the firm declined to elaborate.

The firm had to halt manufacturing and cease shipping the completed vehicles as a result of the fire.

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The batteries were provided by SK On, a subsidiary of SK Innovation in South Korea.

In order to build battery production facilities on American territory, Ford and SK On launched a joint venture last year.

The business stated that they were not aware of any battery problems in any of the vehicles that had previously been delivered to consumers and dealers.

In addition, Ford dealers can continue to sell the supply of cars they have.

Sales pressure

The Ford F-150 Lightning truck is widely followed by investors.

The critical part of the observation is that the pickup truck (an electric version) was the first of its kind to hit the market.

It is also hailed as a significant Ford launch.

The battery problem, however, further exacerbates Ford’s continuing “execution issues,” which CEO Jim Farley first mentioned in early February and which he claims hurt the company’s fourth-quarter profitability.

Farley underlined on Wednesday that the business must enhance its operational performance to match margins with rivals and generate more revenue.

The CEO claims that Ford’s lower profitability compared to its heritage competitors is caused by a cost disadvantage of $7 billion to $8 billion.

James Farley issued an urgent appeal to action at a Wolfe Research Conference, saying:

“We can cut the cost, we can cut people, we can do that really quickly and we’ll do whatever we need to.”

“The reality is that if you don’t change the efficiency of engineering, supply chain and manufacturing, the basic work statement, the way people work, the efficiency of that it’ll grow back.”

“This is really about redesigning what we do in the 120-year-old part of the company.”

Similar problems

Automobile problems and recalls are normally handled by automakers.

Nevertheless, given how much money automakers commit, spending billions to create cars, battery issues are special.

The Chevy Bolt electric vehicle from General Motors has a major and recent problem of comparable gravity.

Due to fire problems, GM was compelled to recall the Bolt EV in 2021.

The business recalled every electric vehicle it has sold since its 2016 production as a result of manufacturing flaws that caused 13 bolts to ignite spontaneously.


Tesla announce US and UK discounts on selected vehicles

Tesla: Every industry has been impacted by the economic crisis, which has forced difficult decisions from major brands.

Tesla is moving in a different route than other companies, which have been laying off employees to decrease expenses.

The developer of electric vehicles is reducing prices in the US and Europe instead.

The news

Tesla is an enterprise that designs and develops electric automobiles, devices for energy storage and solar equipment.

Elon Musk established the company in 2003.

Tesla electric cars are recognized for their efficiency, broad mileage, and striking looks.

Among the most popular Tesla models are the Model S, Model 3, Model X, and Model Y.

Along with building commercial vehicles, Tesla also supplies other automakers with electric powertrain parts and systems.

On the company page, a promotion was uploaded on Thursday.


On the market, Teslas have been selling out quickly.

The company’s earnings have been increasing over the last few years, with massive positive growth.

By 2020, the number of Tesla cars sold worldwide surpassed 5 million.

Since 2018, the Model 3 has dominated the global market for electric vehicles.

The cheapest EV model today is the Model 3.

Additionally, China and Europe have had phenomenal sales for Tesla.

The company hopes to boost production and sales in several countries in the near future.

Tesla has typically performed well in terms of sales, confirming its position as the market leader for electric vehicles.

However, decreasing US expenses may make it simpler for the company to be granted large federal EV tax credits, which would increase domestic and international sales.

The following European nations are presently offering discounts on the Model 3 and Model Y:

  • Austria
  • France
  • Germany
  • The Netherlands
  • Norway
  • Switzerland
  • The UK

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The models

Tesla in Germany apparently decreased the cost of the Model 3 and Model Y by somewhere between 1% to over 17%, according to the vehicle’s configuration.

In December 2022, the Model Y lost ground to the Model 3 in popularity in Germany.

The American EV powerhouse outperformed Volkswagen and its well-known EV, the ID.4, in Germany.

The Volkswagen ID.3 is an entry-level electric car, comparable to the Model 3 at the discounted price.

An independent EV industry analyst named TroyTeslike claims that the price of a brand-new Tesla Model 3 has fallen by 6% to 14% in the US.

The price of the Model Y varied depending on configuration, down to around 19%.

The Model 3 is Tesla’s entry-level sedan, whereas the Model Y is the company’s sport utility vehicle or crossover.

In the US, the more expensive Model S sedan and the Model X SUV are now more inexpensively available.

Tax credits

Depending on its form factor, category, efficiency, driving range, and manufacturer’s recommended retail price, electric cars could qualify for tax benefits in the US.

The US government delayed the implementation of new rules limiting the acquisition of raw materials and battery components until March to  give manufacturers the opportunity to be eligible for a $7,500 clean vehicle tax credit.

As a consequence, EV producers may once again acquire the parts and supplies they need from overseas vendors and still qualify for government financial incentives.

Individuals who qualify for government subsidies are exempt from the requirement for final EV automotive assembly under the existing interim regulations.


The recent tax cut will give EV producers tax incentives in the short and long term.

Customers who committed to spending additional money to purchase new Tesla vehicles before the end of 2022 have had issues with this.

Tesla angered many Chinese consumers by lowering the prices of the Model 3 and Model Y after committing to accept deliveries at higher pricing until the end of 2022.

Numerous customers allegedly protested and asked for refunds, according to Reuters.

Tesla, meanwhile, is unyielding.

In an effort to entice customers to take delivery of their vehicles before the end of the fourth quarter, the firm last month announced a $7,500 discount on the Model 3 and Model Y.

If US customers agreed, the manufacturers would also provide free Supercharging for 10,000 miles at their charging stations.


The business reported that 439,701 automobiles were produced and 405,278 were delivered in the fourth quarter, even after the rebates.

Although analysts had predicted a 50% annual rise in auto deliveries, neither they nor the yearly goals were achieved in the fourth quarter.

Tesla is now operating its first US assembly factory in Fremont, California.

It also has a new plant in Austin, Texas, a production facility abroad in Shanghai, and a brand-new facility in Gruenheide, Germany.


Tesla cuts prices in the US and Europe to stoke sales after lackluster year-end deliveries

Apple and Tesla stocks drop in 4th quarter

Apple: Apple and Tesla are two of the biggest tech entities in the United States, but they are currently dealing with problems with their stocks.

The two companies face significant headwinds in China, which concerns investors.

Apple’s shares fell more than 3% when concerns about the iPhone lineup in the December quarter grew louder.

Meanwhile, Tesla fell by 12% on Tuesday when the company reported that deliveries were below analyst expectations.

China’s influence

The two tech giants’ stock decline can be attributed to challenges occurring in China.

The country accounts for 17% of Apple’s sales and 23% of Tesla’s revenue, which makes it a significant market for the two firms.

Daniel Ives, the senior equity analyst at Wedbush Securities, addressed the companies’ woes, saying:

“China is the heart and lungs of both demand and supply for both Apple and Tesla.”

“The biggest worry for the Street is that the China economy and consumer are reining in spending, and this is an ominous sign.”

He continued:

“In 2022, the worry was supply chain issues and zero Covid-related issues, 2023 is the demand worry and this has cast a major overhang on both Apple and Tesla, which heavily relied on the Chinese consumer.”

iPhone factory problems

Investors are keeping an eye on Apple’s fiscal first-quarter results, which will likely be released later this month and cover the December holiday period.

In October, the largest iPhone factory in Zhengzhou, China, suffered a Covid outbreak.

Foxconn, which runs the factory, set restrictions.

By November, workers protested over a pay dispute, and many employees walked out.

Foxconn attempted to entice them back with bonuses.

Since then, things have settled down.

Reuters reported that the factory was almost back at full operations on Tuesday.

The situation highlighted Apple’s dependence on China for iPhone production.

Following the Covid restriction, the tech giants announced that the factory was operating at a significantly reduced capacity.

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Evercore ISI analysts estimate Apple’s December quarter endured a $5 to $8 billion revenue shortfall.

However, Refinitiv consensus estimates the company could report a 1% annual revenue decline in the December quarter.

As a result, investors who expected a strong showing for the iPhone 14 have grown worried.

However, Apple faces more than just supply chain issues.

China recently overturned its zero-Covid policy in an effort to reopen its economy.

However, there have been Covid-19 outbreaks in large parts of the country, which could influence the demand for iPhones.

IDC research manager Will Wong addressed the issue, saying:

“The key challenge is expected to be on the demand side, especially since resilient high-end consumers may have started to shift their spending to travel while some may have shifted their focus to medical supplies.”

“The shift in spending will pose a key challenge in the short term.”

Tesla delivery

The Tesla share price drop occurred due to a miss in vehicle deliveries.

405,278 cars delivered in the fourth quarter fell below the expectation of 427,000 deliveries.

Demand in China and the supply chain played a role in the decline.

Throughout 2022, Tesla’s Shanghai Gigafactory endured Covid disruptions.

However, analysts also pointed out concern over Chinese consumer demand.

“Tesla will point to supply disruptions and lockdowns as the main problem in China in 2022,” said Bill Russo, the CEO of Shanghai-based Automobility.

“While these are real headwinds, it cannot hide the fact that demand has softened for a variety of reasons, and their order backlog is 70% smaller than it was prior to the Shanghai lockdown.”

Shanghai underwent lockdowns in late March 2022 as the government attempted to control a Covid outbreak.

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Investors have grown concerned that Tesla would decide to cut prices to entice buyers, pressuring margins.

In October, Tesla slashed Model 3 and Model Y prices in China, going back on the prices it made earlier in 2022.

However, another hurdle Tesla faces in China is rising competition from domestic rivals, including Nio and Li Auto.

In addition, there are lower-priced competitors which will launch new models this year.

“Tesla’s models have been in the market for a while and are not as fresh to the Chinese consumer as other alternatives,” offered Russo.

“What we are learning is, EV product life cycles are short as they are shopped for their technology features.”

“Buying an older EV is like buying last year’s smartphone,” he continued.”

“They need new or refreshed models to reignite the market. Just pricing lower can damage their brand in the long run.”


China risks loom over US tech giants Tesla and Apple as share prices plunge