Tesla to Unveil Model Y SUV Amidst Worries of Demand Shortage, Legal Issues

Elon Musk Boring Company

Elon Musk’s Tesla is set to reveal its Model Y Suv soon as the company faces worries over a lack of demand for cars and legal issues involving the SEC and multiple whistleblowers.

MarketWatch reports that Elon Musk’s electric car manufacturer Tesla plans to unveil its new Model Y SUV vehicle at 8:00 p.m. Pacific time on Thursday at the company’s Los Angeles-area design studio; the event will be livestreamed across the internet.

Over the past 12 months, Tesla’s shares have dropped by around 15 percent; this coincides with the company’s repayment of a $920 million debt bond, legal issues with the SEC, worries surrounding vehicle demand, mass employee layoffs, and the announcement of the closing of multiple Tesla store locations.

Tesla shares have dropped by approximately 3 percent since the announcement of the Model Y, according to MarketWatch. Garrett Nelson, an analyst at CFRA, commented on the popularity of the SUV market stating that “the key question is whether consumers will want to buy this vehicle over others in an increasingly crowded segment, particularly given the absence of incentives.”

Nelson continued to state: “The other concern is that the Model Y will likely hit the market around the same time as numerous 2021-model-year electric vehicles that various competitors have in the pipeline.” Analysts for Goldman Sachs stated that the Model Y’s unveiling could boost “incremental reservations” given the larger global market for crossover vehicles compared to sedans.

The analysts, however, noted that the unveiling of a new Tesla vehicle “could further weigh on Model 3 demand as consumers decide to wait a little longer to purchase a Tesla crossover vehicle.” The analysts also expect that the introduction of a cheaper Model 3 vehicle will also have a negative impact on Tesla’s profit margins and the “now expect a meaningful working capital headwind in 1Q19 — and for quarter-ending cash to come closer to the $2bn mark.” But Q1 earnings and deliveries are reportedly expected “to disappoint.”

Tesla CEO Elon Musk lashed out at the SEC recently, claiming that no contempt of court charges should have been filed against him as he did not violate his settlement agreement and “there is no basis to issue contempt sanctions against him.” A new court filing states that Musk “correctly used his discretion to determine” that a tweet he posted on February 19 “did not contain information that could reasonably be considered material” to Tesla.

The filing claims that Musk’s tweets are better understood as a “proud and optimistic restatement of publicly disclosed information.” The filing notes that Musk’s tweets about Tesla’s production figures came after the close of market and that Musk has attempted to comply with the SEC settlement by tweeting less. The filing further adds that the SEC’s interpretation of the settlement agreement “raise serious First Amendment issues.”

Tesla has faced tough times recently, closing retail stores in favor of an online-only business model — then walking this decision back and stating that some stores will stay open shortly after landlords informed the company they would have to finish out their leases, and raising nearly all vehicle prices by three percent.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or email him at lnolan@breitbart.com


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