Tesla is now selling Powerwalls practically at cost in certain regions in response to California’s devastating fires.
I want to lead into this with an explanation of what that headline means for anyone not in the business world. Imagine you have a product, let’s say a retail business. Your store has needs. You need to pay the rent, pay employees, pay for product supplies, etc. You buy products at wholesale, add costs for various reasons, and then try to make a profit on sales. If you sell your products for the same price you bought them, there is no profit. You make no money. Keeping all of that in mind, some of Elon Musk’s recent tweets are fascinating, especially in the context of the ongoing debate between Tesla fans and Tesla short sellers as well as Tesla’s well known efforts to remain profitable.
If you’re directly affected by wildfire power outages, Tesla is reducing Solar+Powerwall prices by $1000 as of today
— Elon Musk (@elonmusk) October 28, 2019
We don’t make much money on this product, so $1000 actually means a lot
— Elon Musk (@elonmusk) October 28, 2019
When it comes to people in need, Elon often thinks with his heart and not his business head. Most recently, he made the decision to lower the prices of Tesla Solar + Powerwall by $1000. An initial assumption a cynical person might make is that this is a marketing ploy. However, for certain reasons, that doesn’t seem to make sense. Tesla has been supply limited on the Powerwall for a long time, according to various reports, and the basics of “supply & demand” indicate that the company shouldn’t be dropping prices on a supply-constrained product like that. Further, Elon noted in another tweet that Powerwall shipments to places outside of California would be delayed so that Tesla could prioritize deliveries to people affected by the California fires, again indicating that Tesla is supply constrained rather than demand constrained, and shouldn’t be lowering prices from a business perspective at the moment.
Apologies to those waiting for Solar/Powerwall outside California, as we are prioritizing those affected by wildfires
— Elon Musk (@elonmusk) October 28, 2019
From what anyone can tell, Elon seems to genuinely feel horrible about the situation in California and is using Tesla to help those affected or potentially affected.
When it comes to business, a company needs to make money. Here we have Elon Musk doing something from the heart that might not be good for business. Sometimes it’s okay to do things that are not good for business because, after all, when lives are at stake, it’s about helping those in need. This is why people love and support Tesla and Elon Musk.
Elon has a good heart. He shared the jewelry website of a total stranger who wrote him an open letter in 2018. He later encouraged her when she had her life turned upside down. That stranger was me. He’s done amazing things for random people numerous times because he is the type of person who cares about everyone and has deep empathy.
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