The demand for - the demand for Model 3 is insanely high. The inhibitor is affordability. It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary.
I think the reality is much simpler, as explained in the Q4 call transcript above. There is a lot of demand for Tesla cars, BUT at a lower price point, once the early adopter well-to-do crowd has been satisfied. They know it and have been striving for months to cut manufacturing costs and all other costs, in order to enable them to reduce prices and still remain profitable. No more free supercharging, no more free car giveaways in the referral program. And yes it makes sense to close expensive retail locations in malls, which were necessary to generate interest and brand recognition when Tesla was unknown, but are now probably a major cost item.
They are (finally) positioning the product line for the longer haul. The Model 3 pricing makes very much sense (except perhaps the software options which I expect to become cheaper as time goes by), with reasonable price gaps encouraging buyers to stretch as much as they can towards the higher variants. I strongly doubt the new product offering is sold at a loss, though obviously they could have milked a higher profit per unit off the remaining buyers who are not so price-sensitive. But they chose instead the much better strategy of moving ahead quickly and maximizing their production capability in the process, leaving a much more difficult landscape for the upcoming competition who can't seem to make profitable EVs yet, and who are also wary of cannibalizing their ICE cars and therefore moving very cautiously.
The next move should be the unveiling of the Model Y. I hope they avoid taking reservations for it, except perhaps for the higher-priced variants in the US, as the reservations don't give any advantage to potential buyers except during the very early ramp-up.
