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Tesla Inc. has unveiled cheaper, pared-down versions of its two best-selling electric vehicles, in a bid to re-energize sales amid an expected slump after the end of U.S. tax credits for EV buyers.
The move did not sit well on Wall Street, however, with Tesla’s stock
accelerating losses in the final hour of trading Tuesday, closing down 4.5%.
“We view the announcements as a big disappointment,” said Garrett Nelson, an analyst with CFRA.
“It can’t hurt from a sales volume perspective, but we think the announcement is a disappointment for investors desperately hoping for new models such as the long-awaited Roadster, and Tesla’s sales are still likely to drop meaningfully” starting in the fourth quarter, he said.
The company had teased the news with a pair of cryptic tweets over the weekend, but the newly announced trims still hover closer to $40,000 than $30,000 — a price that many investors view as putting the vehicle within mass-market reach.
Tesla also renamed its cheaper versions as “standard.” The Model Y trim will now sell for $39,990; until yesterday, the cheapest Model Y trim cost just under $45,000. For the Model 3 sedan, the standard trim now goes for $36,990.
The new prices also do not make up for expired federal tax credits worth up to $7,500 for certain EV buyers. The Biden-era incentives ended last month.
“With the end of the federal incentives, Tesla needed to fill the pricing gap,” said Sam Fiorani with AutoForecast Solutions. Starting under $40,000 for the Model Y standard “moves the brand into the range where buyers who needed the $7,500 tax credit would be comfortable,” he said.
Tesla is known for constantly shifting prices, Fiorani said. “Adding the lower priced model allows the previous entry-level Model Y to remain at its $45,000 level and keep the residual values relatively steady. The new model should keep the factories humming.”
The cheaper versions sacrifice some performance: The Model Y standard, for example, can go 321 miles between charges, and go from zero to 60 mph in just under seven seconds, according to Tesla’s website. That compares with a range of 357 miles and 0-60 mph in 5.4 seconds for the next trim up, “premium” with rear-wheel drive.
Tesla has been faulted for not launching an entirely new EV in looks and technology except for the Cybertruck, which has limited appeal and carries a price tag of around $80,000 for its cheapest trim. That price remains unchanged.
“One of the biggest reasons behind Tesla’s market-share losses is the staleness of its vehicle portfolio,” Nelson said.
In July, Tesla Chief Executive Elon Musk said that a stripped-down version of the Model Y, Tesla’s most popular vehicle, would be one of two long-awaited, cheaper models from the EV maker.
Source : marketwatch
