When Tesla decided to cut the list price for its new electric cars by up to 20 percent earlier this year, many of us were worried.
What impact would this have on the Tesla brand and how would those who had recently paid top dollar feel when one of their most valuable assets had just taken a hit?
Well, the consequences are now being seen. The Financial Times recently reported that Tesla cars now lose value faster than rival models. The article cited pricing agency CAP HPI as saying the value of a new Model 3 with a long-range battery bought in January this year in the UK for 57,435 pounds is forecast to fall 46 percent to 31,300 pounds by January 2024.
When you cut prices for reasons that consumers don't understand or don't like, you can destroy brand value overnight. Something that takes years to build has been quickly eroded because Tesla moved faster than the market could take.