The Model Y was the best-selling electric vehicle in the US last year. And remains one of the top-selling SUVs overall.
Ford Motor Co. CEO Jim Farley said that price wars are “breaking out everywhere,” even though Musk denies that Tesla is initiating one.
Farley’s Mustang Mach-E SUV, was heavily discounted last quarter, and lost significant market share to the Model Y. Tesla has been reducing prices globally, with French carmaker Renault SA considering it a challenge and examining its pricing strategy in response.
Automakers in China have also followed Tesla with steep discounts, and an analyst has warned that some companies may not survive.
Musk’s aggressive price cuts may lead other automakers to reconsider their investment in electric vehicles, slowing down their pace of research and development. Morgan Stanley analyst Adam Jonas stated last week that legacy automakers might need to strategize a response to Tesla’s aggressive moves.
“We are questioning whether this is the ‘moment’ where the boards of the legacy OEMs can reconsider dialing back the magnitude and timing of their EV capex and R&D plans,” Jonas said.
