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Elon Musk Podcast

Elon Musk's Price War Strategy: A Brilliant Move or a Dangerous Gamble?

9 min • 27 april 2023

Tesla's aggressive price-cutting strategy has divided opinions as the company aims to dominate the global automotive industry.

In the quest to rule the automotive world, Elon Musk's strategies are polarizing opinion. Some compare him to Henry Ford in the Model T era, while others liken him to Steve Jobs bringing about the iPhone revolution. But what if he's more like Rick Wagoner, who led General Motors to near destruction?

Tesla's numerous price cuts this year, taking nearly a third off the cost of its top-selling US model, have left industry insiders debating whether this strategy is revolutionary or desperate. Ford CEO Jim Farley compared Musk to Ford himself, citing the development of an innovative product, efficient manufacturing, and driving down costs as key similarities. On the other hand, the Jobsian theory posits that Musk is applying Silicon Valley tactics to the electric vehicle (EV) industry in an attempt to outperform rivals like Rivian Automotive Inc. and Lucid Group Inc.

The cautionary example of General Motors comes to mind, as Wagoner's reliance on incentives after the September 11 terror attacks ultimately led to GM's and Chrysler's bankruptcy in 2009, with Ford narrowly avoiding the same fate.

Tesla's plans have been scrutinized before, with investors like Jim Chanos, David Einhorn, Cathie Wood, and Ron Baron divided over the company's survival and growth potential. Tesla's stock has surged more than 750% in the last five years, proving doubters wrong.

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