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😳 Deutsche Bank concerned about Tesla

Author

Wouter Teunissen
May 22, 2023

Good morning! Thanks for opening your Tesla Folder again.

$TSLA had a very good start to the week!

Here’s what we have for you today:

  • Deutsche Bank concerned about Tesla’s price cuts

  • Tesla will start advertising

  • Quick bites

  • Market watch

Deutsche Bank concerced about Tesla’s price cuts

🤩 Tesla wowed Deutsche Bank analysts during a recent meeting and tour of its Giga Texas factory. However, the analysts acknowledged the challenges ahead, including the likelihood of more price cuts and reduced profits.

While Tesla has faced struggles in the past, it has recently experienced significant success. It is now turning a profit, boasting impressive margins, expanding its factories and making plans for further growth.

📈 Despite ongoing adversities, such as having to raise vehicle prices in 2022, Tesla has been gradually reducing prices since the end of last year. This trend reflects the company's ability to produce more cars than the current demand necessitates.

To stimulate sales in a challenging economic climate and maintain manageable inventory levels, Tesla continues to cut prices and offer incentives. While this approach boosts sales, it also puts pressure on margins and future earnings.

👍 Despite these challenges, Deutsche Bank analysts were thoroughly impressed during their visit. They expressed their enthusiasm and support, stating that they are "all in" and feeling encouraged. The analysts praised the layout, design, and high efficiency of Giga Texas.

They also confirmed that Tesla remains committed to the production of the Cybertruck, despite lingering doubts. The factory in Austin is still undergoing equipment installation, and manufacturing capacity is expanding.

Tesla will start advertising

🎬 Tesla has potentially unveiled its first-ever commercial, shortly after Elon Musk announced that the company would begin advertising for the first time. The 2-minute video titled "Drive to believe" was shared on Tesla Asia's Twitter account, giving a glimpse into the company's upcoming ad campaign, which may feature driver testimonials.

Traditionally, Tesla has relied heavily on word-of-mouth and Musk's social media presence for promotion. Musk referred to previous Twitter promotions as "preaching to the choir".

🗳️ The decision to advertise came after a shareholder suggested that Tesla should reach out to non-Tesla fans. Musk acknowledged this suggestion and mentioned that Tesla does not have a clear advertising strategy yet. He believes ads should be informative, entertaining and dispel misconceptions.

Musk has previously expressed his dislike for advertising, preferring to allocate funds to research and development instead.

Quick bites

Market watch