Tesla. We are a well-known electric car manufacturer, and have been experiencing various market changes. Our company is keen to understand how these changes impact the market equilibrium for our vehicles.
a) Recently, a new environmental regulation was passed that offers significant tax incentives to consumers who purchase electric vehicles (EVs). As a result, there is a growing consumer preference for EVs over traditional petrol cars. How might this impact on the demand for our vehicles? Explain.
b) Due to advancements in technology, Tesla has developed a more efficient production process that reduces the cost of manufacturing electric vehicles. What impact will this have on our the prices and sales of our cars? Explain.The above are two questions, please answer separately, and the total number of words added up to the two questions is less than 200 words
a) The new environmental regulation providing tax incentives for EV purchases would likely stimulate demand for Tesla's vehicles. By reducing the cost barrier for consumers, the incentives make EVs, like Tesla's, more price-competitive with traditional cars, encouraging more buyers to consider electric vehicles.
b) Technological advancements leading to manufacturing cost reductions can enable Tesla to lower car prices, increasing affordability. This could drive up sales as lower prices attract more customers, especially when combined with the aforementioned tax incentives, potentially attracting a larger segment of the market.
