Tesla (D.S.L.A) announced over the weekend that it will raise US Model Y prices on April 1. Meanwhile, the Model Y will go on sale in Europe on March 22. Meanwhile, the global EV giant is also currently offering new inventory discounts on Model Y trims in China. Tesla shares rebounded early Monday.
X
The company will raise the price of all Model Y trims in the U.S. by $1,000 next month, while Model Y prices in Europe will rise by about $2,100 on Friday. In China, Tesla is offering discounts of $1,000 to $1,500 on stock Model Y vehicles.
The price cuts come after more than a year of Tesla slashing vehicle prices and offering discounts to keep pace with sales. As a result, car gross margins have fallen below 20%, which peaked at 30% in Q4 2021 amid an industry chip shortage.
Analysts argue that this strategy is not helping demand and is hurting the company. Tesla watchers report that inventory is currently too high and that the EV company's price hikes do not indicate an increase in demand.
Troy Teslike, a valuable source of delivery estimates and Tesla data tracking among retail Tesla investors, wrote on X, earlier on Twitter, Saturday that the U.S. price increase was “not due to excess demand.”
“Based on recent data, inventory is currently high,” Tesla posted. “Buy Now Before Tesla's News Increases.”
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With the first quarter just two weeks away, Tesla appears to be missing deliveries. According to FactSet, the Wall Street consensus currently has Q1 deliveries of 487,000 units. However, many analysts have cut forecasts in recent days.
Tesla is expected to announce Q1 deliveries in early April.
Tesla stock performance
Shares of TSLA rose 2.7% to 167.81 during market action on Monday. Last week, Tesla shares fell 6.7% to 163.57. On Thursday, Tesla shares fell 4.1% to 162.50, hitting new 2024 lows and levels not seen since May 2023. TSLA fell 19% in March.
Wells Fargo cut Tesla from equal weight to underweight last week, with a price target of 125 from 200. The company's underweight rating is equal to a sell rating and its price cut represents a 23% downside risk to current TSLA levels.
Meanwhile, UBS cut its Tesla stock price target to 165 from 225 and maintained a neutral rating on the stock last week. UBS cut its Q1 delivery forecast to 432,000 units from its previous view of 466,000. The company reduced full-year deliveries to 1.96 million from 2.02 million.
With 2023 in the rearview mirror, analyst consensus now has 2024 Tesla earnings below 2023 levels, signaling another year of negative growth for this growth stock. Wall Street expects Tesla to earn just $2.97 per share in 2024, according to FactSet. That would be about a 5% decline versus last year's $3.12.
The latest analyst FactSet “sharp consensus” pegs call for 2024 EPS of just $2.62.
Morgan Stanley Tesla bull Adam Jonas recently issued an investor note in which he cut his Tesla 2024 revenue forecasts by 25%, saying the EV giant could “potentially” lose money this year.
Jonas cut his Tesla price target to 320 from 345, but maintained an overweight rating on the stock. Jonas cut his Tesla 2024 EPS forecast to $1.51, down from his previous view of $2.04 per share, as auto gross profit, excluding regulatory credits, fell 11.4%, as analysts continue to expect demand problems for EVs.
The EV company is ranked eighth in the 35-member IBD Automobile Manufacturers Industry Group. The stock has a composite rating of 28 out of a possible 99. Tesla stock also has a Relative Strength Rating of 9 and an EPS Estimate of 68.
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