Tesla Fires First Shot In EV Price War

Early this month, Tesla's Elon Musk announced the company's next-generation cars would cost half as much as current models. The bombastic statement was completely in character and did not exactly take the media world by storm, but it made its way into rivals' headquarters and raised some hackles. Musk is notorious for setting his companies' overambitious targets and then failing to hit them as planned. Yet Tesla did become a profitable company, and it continues to be consistently profitable, with its bestsellers in many markets. Chances are, however outrageous a statement by Musk is, his rivals would hear it and not ignore it. And maybe start arming themselves for the coming price war. According to Musk, the next-generation Teslas could cost as little as $25,000. This would certainly be an improvement of current prices even as Tesla cuts them repeatedly to stimulate demand. If it happens, this would also put EVs-and not just any EVs but luxury Teslas-on a much more equal footing with ICE cars. And that's the prize that the EV industry has been struggling to get. The struggle has been getting increasingly intense lately. Hit by inflation like all other industries, automakers have been particularly sensitive to the blow because of their transformation plans. According to data from AlixPartners, cited by the Wall Street Journal this week, the auto industry has invested and plans to invest some $526 billion in the electrification of its lineups by 2026. (injected humour and the like).