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Tesla’s Price Hike Conundrum Leaves Analysts Perplexed

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Tesla, Inc. TSLA recent warnings about the Model Y price hike that would come into play beginning in the second quarter elicited mixed reactions from analysts.

Diving into the Present, Navigating the Future: Deepwater Asset Management’s Gene Munster shared his thoughts on Tesla’s recent move. He expressed confusion over the perceived ambiguity of a mailer from the company, highlighting modest discounts on the Model S, X, and Y vehicles as well as a $1,000 increase for the Model Y, set to take effect on April 1.

This pricing rollercoaster has left the tech investor bewildered. Munster pondered the implications of the back-and-forth adjustments, questioning the impact on both demand and margins. Despite his short-term concerns, he remained optimistic about Tesla’s trajectory in the long run. Anticipating challenges in 2024 due to high interest rates, he forecasted better prospects in 2025 and 2026 with reduced rates and the introduction of a more affordable model.

Unraveling the Puzzle: Insights from Industry Players

Gerber’s Viewpoint: Former Tesla enthusiast turned skeptic Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, dismissed Tesla’s pricing strategies as an β€œold trick.”

Gerber nonchalantly labeled the price hike warning as a stale tactic. He shrugged off the move as a mere ploy to boost sales in the final weeks of the quarter. Skeptical of any significant shift in trends, he downplayed the significance of Tesla’s latest announcement.

The Significance of the Situation: Tesla is gearing up for the release of its first-quarter delivery report in early April. With challenges in China sales and slow production ramp-up for key models like the Model 3 and Cybertruck, analysts have adjusted their expectations.

Recent data from China revealed a decline in week-over-week registrations for Tesla vehicles. Analyst TroyTeslike projected deliveries of 435,000 units for the quarter, falling short of the consensus estimate of 475,000 units. Notably, Tesla typically releases its own consensus estimate a week before the official delivery update. In a recent analysis, TroyTeslike highlighted 422,875 units as a critical threshold for Tesla to avert a year-over-year decline in sales volume.

As of the latest update, Tesla shares showed a modest 0.42% increase, trading at $172.04 on Wednesday, according to Benzinga Pro data.

Considering the Road Ahead: Observations on Tesla’s Market Journey

Visual via Shutterstock

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