To The Moon

$Tesla Motors(TSLA)$

Gross margin is the difference between a company's revenue and its cost of goods sold (COGS). It's expressed as a percentage of sales.

Tesla has lowered its product sales price 5 times in 2023, as of October 25, 2023.

Here is a timeline of Tesla's price cuts in 2023:

January 19: Tesla lowered the price of the Model 3 and Model Y by $1,000 each.
March 7: Tesla lowered the price of the Model 3 and Model Y by an additional $2,000 each.
April 7: Tesla lowered the price of the Model S and Model X by $5,000 each.
August 4: Tesla lowered the price of the Model 3 and Model Y by an additional $3,000 each.
October 5: Tesla lowered the price of the Model 3 and Model Y again, with the Model 3 now starting at $42,990 and the Model Y starting at $52,990.
All these leads to lower revenue:

These price cuts have made Tesla's vehicles more affordable and accessible to consumers. They have also helped Tesla to maintain its market leadership position in the electric vehicle market.

Tesla (TSLA) would be particularly vulnerable to a combination of quantitative tightening (QT) and recession. QT is the process of the Federal Reserve reducing the size of its balance sheet, which means selling bonds and other assets. This can lead to higher interest rates and tighter financial conditions, which can hurt demand for big-ticket items like electric vehicles.

A recession would also be a major blow to Tesla, as consumers would likely tighten their spending and delay or cancel purchases of new cars. In addition, Tesla is still ramping up production at its new factories in Texas and Germany, and a recession could make it more difficult to meet its production targets.

Here are some specific ways in which a combination of QT and recession could hurt Tesla:

Higher interest rates would make it more expensive for consumers to finance Tesla vehicles. Tesla has relied on strong leasing demand to drive sales growth, but this could be hit hard if interest rates rise significantly.
Tighter financial conditions could make it more difficult for Tesla to raise capital. Tesla has ambitious plans to expand its production capacity and product lineup, but it will need to raise a significant amount of money to do so. If financial conditions tighten, it could be more difficult and expensive for Tesla to borrow money.
A recession would lead to lower demand for Tesla vehicles. Tesla vehicles are still relatively expensive, so consumers are more likely to delay or cancel purchases of a Tesla if they are facing financial difficulties.
A recession could disrupt Tesla's supply chain. Tesla relies on a global network of suppliers for its components. A recession could lead to disruptions in this supply chain, which could make it difficult for Tesla to produce vehicles.
Overall, a combination of QT and recession would be a major challenge for Tesla. The company would need to find ways to reduce costs, increase demand, and secure financing in order to weather the storm.

If you think Cathie Wood's prediction will be right, look at this:

Conclusion:

TSLA could go down to pre-pandemic level by the end of 2024