As early as 2018, Tesla CEO Elon Musk (Elon Musk) said he would build an electric car with a price of $25000 and a lower price than the Model 3 within "three years". The model was widely expected to hit the market in 2022. But Mr Musk's comments on a conference call with the four Seasons last month dashed hopes.
Mr Musk said at the time that maximising production in the existing product lineup and increasing annual delivery by 50 per cent was a top priority in 2022 while the supply of parts was still tight. Tesla won't release any new models this year, and he's not currently developing a model that costs $25000. In response, one analyst pointed out that this is a big risk.
Tony Sacconaghi (Toni Sacconaghi), an analyst at Bernstein (Bernstein), an investment bank, wrote in a recent research note that since Tesla is not currently developing a new low-cost model, "it seems unlikely that Tesla will launch a ($25000) car before 2025." This decision "seems to run counter to Tesla's goal of promoting the popularity of electric vehicles as soon as possible."
It may also be at odds with Tesla's target of an average annual delivery growth of 50 per cent in the foreseeable future. Tesla's sales grew by 87 per cent in 2021.
The lower price will expand Tesla's potential market and help him sell more cars. Compact and subcompact cars account for about 20% of the u.s. car market. The SUV and crossover are the best-selling models. Tesla's Model Y covers this market segment.
Joseph Spark (Joseph Spak), an analyst at Royal Bank of Canada (RBC), said that in the fourth quarter of 2021, the average transaction price of new cars in the United States was about $45000, while the average transaction price of Tesla cars was about $52000.
Higher prices will limit sales, and limited models will also dampen sales potential. Sacconaghi points out that there are only two models that sell more than 1 million cars a year, and they sell for between $20, 000 and $35000. He did not specify the two best-selling models, but the Toyota Corolla (Corolla) and RAV4 each sell more than 1 million vehicles a year.
Sacconaghi also hopes that Tesla can develop a low-cost car while increasing the production of existing models, and takes Apple, which is also a disruptive and innovative technology, as an example. He pointed out that between 2010 and 2012, apple's R & D spending as a share of sales fell to 2% from nearly 4% in previous years, resulting in fewer new products and slower sales growth after 2012.
Sacconaghi fears that if Tesla delays plans for a new product, it will follow Apple's lead, and that even if Tesla launches the Cybertruck, in 2023 and continues to invest in its self-driving products, it will not be enough to drive sales growth.
Sacconaghi rated Tesla's shares as "sell" and set a target price of $300per share, about 67 per cent lower than Tesla's current share price, one of the lowest target prices offered by Wall Street. The average target price given by analysts is about $965.
Tesla shares edged up 0.1% to $923.39 on Wednesday. The stock has fallen more than 20 per cent so far this year.
