Following the settlement of a $920 million bond payment, Tesla announced a $35,000 version of its Model 3 car along with its new Model Y vehicle, but the sudden timing of the announcements have raised concerns amongst analysts about consumer demand for Tesla cars.
Tesla was recently forced to pay off $920 million in debt after its share price was unable to reach the level at which the debt would convert into shares of the company as opposed to cash repayment.
At the same time, Tesla announced a $35,000 Model 3 vehicle leading many analysts to worry about the possibility of a shrinking profit margin on Tesla vehicles; while Tesla also announced that it would be closing its global retail store network and planning to only sell vehicles online. Now, the company has announced a new SUV vehicle titled the Model Y, which has led many analysts to question the demand for Tesla vehicles.
Hot on the heels of these big changes, Elon Musk has announced a brand new vehicle in the Tesla lineup — the Tesla Model Y.
RBC analyst Joseph Spak stated that the timing of these announcements is a reason for concern saying: “A Model Y announcement so shortly after the $35k [Model 3] suggests that consumer reaction toward the $35k Model 3 may not have been as strong as the company had hoped. We believe there has been a fall-off in U.S. demand and softer than expected demand in Europe/China.”
The Model Y is set to be unveiled on March 14 and according to Tesla CEO Elon Musk, will cost 10 percent more than the company’s Model 3 vehicle and will have “slightly less range” for the same battery.
Detailed specs & pricing will be provided, as well as test rides in Y
— Elon Musk (@elonmusk) March 3, 2019
Tesla’s high vehicle prices were always a worry for investors, but Tesla’s Model S and Model X vehicles were described as premium electric vehicles making the high price point less of a problem; however, the Model 3 car was aimed at the mass market, meaning that a lower price point was required. The $35,000 price point has been a selling point for Musk for a long time, but has faced a long string of delays.
Recently, the SEC requested that a federal judge hold Tesla CEO Elon Musk in contempt after the CEO tweeted: “Tesla made 0 cars in 2011, but will make around 500k in 2019.” A few hours later, Musk corrected himself: “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”
In response to this, the SEC said in court documents filed on Monday: “He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with internet access.” The SEC further said that both Musk and Tesla confirmed that his tweets had been pre-approved by the company.
Breitbart News will continue to report on the SEC’s charges against Musk and the reveal of the company’s new Model Y vehicle.