On the surface, Tesla investors claim this will help the company break sales records and frighten competitors. The company’s detractors say this is a desperate measure to keep production volumes high, with two factories still trying to reach total production capacity. They all may be partially correct, which shows just how complex the entire situation is.
Demand is regulated by price. When Tesla sold only the Model S and Model X, it never reached the production volumes that the Model 3 allowed it to achieve. If the company’s cars get cheaper, more people may indeed be willing to buy them. However, doing so with vehicles that were already for sale makes everybody else who bought them for higher values feel deceived. That’s what we saw in China and now also in the U.S. and Europe regarding the EV maker.
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