After Tesla cut prices of its top-selling Model Y by as much as 20% and discounted its most expensive vehicles by tens of thousands of dollars, Musk said in late January that orders were running at almost twice the rate of production. The figures reported Sunday indicate there was a slowdown later in the quarter, as the company ended up making almost 18,000 more cars than it sold.

“Continued excess production over deliveries will keep the debate going on price elasticity versus general demand weakness,” Philippe Houchois, a Jefferies analyst with a buy rating on Tesla stock, said in a note.

Eoin Treacy's view

If you cut prices and sales don’t jump there are only two options. Either you have the wrong price or the wrong product. I bought a new car a year ago. I test drove a Model Y and Model 3 and decided to go with another SUV instead. The price points were about the same after added extras and the subsidies did not apply because of income limitations. That seems like a major issue for Tesla. They are attempting to compete with luxury brands on quality alone. That is a hard sell against brands with decades of reliability and customer relationships.
Tesla’s share continues to pause in the region of the 200-day MA and the psychological $200 level. A sustained move above $220 will be required to break the downtrend.

Consumers are accustomed to technology providing more for less. The cost of an iPhone may have increased but it is now a much more useful product that has displaced several other services. Tesla is still a car and the promise of autonomy is still very much in the future. As inflationary pressures bite, consumers will demand both value and longevity in products. (the one good knife mentality). That’s incompatible with the built in redundancy of product design.