A year of Tesla price cuts and Musk distractions

A year of Tesla price cuts and Musk distractions

Tesla CEO Elon Musk. Justin Sullivan/Getty Images
  • Tesla started the year back on its heels.
  • Elon Musk’s price war and the Cybertruck gave the company big wins in 2023.
  • Musk’s personal drama continues to overshadow some of Tesla’s success.

Tesla did a lot of growing up in 2023.

Elon Musk’s company started the year back on its heels, with overflowing inventory, a stale-looking lineup, and shrinking profit margins due to a slew of hefty discounts.

All of these problems were shockingly mundane for a company helmed by one of the most polarizing figures in tech, and some saw it as a sign that Wall Street darling Tesla might just be a normal car company after all.

The normality at Tesla was welcomed and encouraged by investors, who were frustrated by Musk’s antics at his social media company X (formerly Twitter) and the knock-off effect on Tesla’s value.

“The Cinderella ride is over for Tesla,” Wedbush analyst Dan Ives said in a January note to clients. “Musk now needs to navigate the company through this Category 5 dark macro storm instead of focusing on his new golden child Twitter, which remains a distraction and overhang for the Tesla story/stock in our opinion.”

With 2023 largely in the rearview, automotive analysts who spoke with Business Insider agree that this year Tesla has taken a new place in Musk’s empire, alongside X and SpaceX, as a steady and reliable business.

Musk won his own price war

Investors were initially nervous at the start of the year when Tesla’s series of price reductions ate into the company’s industry-leading automotive margins — often touted as justification for Tesla’s market value eclipsing rest of the automotive industry.

But later in the year when the EV market experienced a sudden shift in buyers – away from early adopters and toward more budget-minded shoppers – Musk came out on top. While Tesla got ready to roll out its long-awaited Cybertruck, competitors like Ford, GM and Mercedes-Benz warned investors that their EV businesses were hitting roadblocks.

“This is a pretty brutal space,” CFO Harald Wilhelm said on an October analyst call. “I can hardly imagine the current status quo is fully sustainable for everybody.”

While legacy car companies go back to the drawing board on their EV ambitions, Tesla has lots of runway to price their cars correctly for the market while still turning a profit on battery-powered cars – something almost none of Tesla’s competitors have achieved as…

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