Tesla’s New SUV Launch vs Tesla’s Stocks

Over the years, Tesla has invested quite a lot in the manufacturing of its SUVs. It’s latest SUV model which is the Model Y launch was announced earlier this year. Starting at $39,000 the Model Y can cover up to 300 miles per range, and is likely to be due by the fall of 2020. Being relatively affordable, the Model Y can be accessible by a wide customer base who cannot afford a more luxury car, yet are interested in an electric car with a lot of space.

 Considering that Tesla’s stocks have suffered a great deal in recent times, many wondered if the launch of the new Model was the right thing for the company. As of March 2019, Tesla’s shares were down to 3.3% to $285, adding to already recorded losses.

The introduction of the new Model is likely to negatively affect the stocks of Tesla on a short-term base, considering the fact that the Standard Range Model 3 was only introduced a few months earlier before the launch announcement of the Model Y. It shares about half its parts with the Model Y, the only difference is that the Model Y is quite bigger and has more room for passengers. It would only take a while before the profits of the Standard Range Model starting at $35,000 are recorded. Still, on the Range Model 3, a convertible debt of $920 million needed to be paid alongside the cost of shipping the Model to parts of Europe and China.

Having all of these on the ground already, to what use is the new Model? In spite of the Model 3 having high profitability rates as most buyers mostly consider its affordability, Tesla still faces threats in its overall market performance. Musk has reportedly stated that he didn’t expect the company to be profitable by the end of the first quarter of 2019.

 Compared to the 3.3% of Tesla’s shares dropped to by the first quarter, it is currently between a 6% range as of Saturday, 23 November 2019. On average, Tesla’s stocks still hold a $314.83 price target, according to the 32 Street analyst on Tesla, FactSet. By Monday, a 9% discount would be represented by the current average price target. In total for the year, Tesla’s shares are up to 7%.