In this article by CNBC, it talks about how Tesla needs to make cheaper Model 3s in order to make them more affordable for everyday people. Tesla announced that they currently have plans to cut around 7 percent of its workforce in efforts to reduce costs. This amounts to around 3,100 workers throughout the company. CEO Elon Musk stated that one of the primary reasons for the job cuts was that Tesla cars are still too expensive for most people.
According to the article the sales boost from the $7,500 U.S. federal tax credit is running out, and that stands to hurt demand in the United States. Tesla’s current goal is to cut costs in an attempt to get closer to the $35,000 dollar price target for the Model 3 that they originally promised in 2016. This would help improve sales and make Tesla cars more affordable to more people.
It is very interesting to consider that currently the cheapest Model 3 available is the midrange rear-wheel-drive model, which starts around $44,000. This means that Telsa would have to decrease the price of even the base model by $9,000 or around 20 % just to get the cost to its original price target goal of $35,000. This seems like it is going to be a very long process and that cutting jobs is just a starting point for them.
One main takeaway that I have from this article is that the price of your product is extremely important. It does not matter how revolutionary your product is if not very many people can actually afford to purchase it. If Tesla is able to bring the price of the Model 3 down to around $35,000 I believe that you would see an increase in demand and popularity of Tesla products. Furthermore, I believe that electric vehicles are the way of the future and that price and reliability are truly the only obstacles that are in the way.
Austin Blomme Business Communications 
I was very interested in this blog post because I personally, want a Tesla. Considering Tesla’s cheapest model still starts around $44,000 I know it will be a long time until I will be able to afford one. However, like you stated Tesla wants to reduce the cost down to $35,000 like they had originally planned in 2016. This price decrease for customers would also reduce their overall employment, laying off over 3,100 workers throughout the company. In my opinion, since Tesla has already tried to reduce the cost in 2016 and they need to lay off more workers, this price decrease will not benefit Tesla as a company. First, new technology comes out just about everyday and with making the model cheaper the less likely the company is to put in the newer technology making their vehicles less luxurious. Also, in regards to laying off over 3,100 workers this might make their production process much slower, making buyers have to wait weeks maybe even months before getting their new car.
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I like many people love Tesla and what they stand for, but like others, not the average person can afford a Tesla. I believe that if Tesla can make the three different models of their cars cheaper they will boost their sales. I think that most people are willing to go full electric for their car they just have to have a reasonably priced car as most people can’t afford a 50,000 dollar car. As much as I think that electric cars are the future, there are a few things that need to be invented before they can be the main types of cars on the market. I think that if Tesla were to make the car production more automated they can cut costs and make the sticker price go down to around 35,000 dollars which is way more reasonable.
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