Is it "divine operation" or "small play"? Wall Street is hotly discussing Tesla's affordable Model 3/Y
After Tesla launched the "streamlined version" of the Model 3 and Model Y, it once again became the focus of the market. Although the new models are still priced above the promised $30,000, analyst Gene Munster praised the price reduction measures, believing that this will help achieve the 16% delivery growth target for 2026. Wedbush analyst Dan Ives pointed out that the low-priced models are an important step for Tesla to restore its quarterly delivery targets, especially after the expiration of the electric vehicle tax credit policy
According to Zhitong Finance APP, Tesla (TSLA.US) has once again become the focus of the market after launching the "simplified version" Model 3 and Model Y. However, the prices of these two models are still higher than the $30,000 threshold it once promised to the mass market. Clearly, the expiration of the electric vehicle tax credit policy has put greater pressure on automakers, prompting them to prioritize improving product cost-performance ratio.
Deepwater Asset Management analyst Gene Munster expressed "appreciation" for Tesla's price reduction measures—this time, the price of Model Y was lowered by 11% to $40,000, while the price of Model 3 dropped from $39,000 to $37,000. Munster believes this pricing adjustment makes it more likely that Wall Street's expected 16% delivery growth target for Tesla in 2026 will be achieved. He pointed out, "Most people originally expected Tesla to launch a simplified version of Model Y, but the actual model launched is essentially consistent with the original version, with only limitations on body color and wheel options."
Munster further noted that the new pricing of Model Y and Model 3 may put pressure on competing models priced between $30,000 and $35,000, such as Nissan (NSANY.US) Leaf, Hyundai Ioniq 5, and Ford (F.US) Mustang Mach-E. He emphasized, "For Hyundai, Ford, and Nissan, the challenge does not come from price, but from software. As full self-driving (FSD) technology and onboard computing power become core elements of the electric vehicle experience, Tesla's advantage in software continues to expand."
Wedbush Securities analyst Dan Ives believes that launching lower-priced models is the first step for Tesla to return to its goal of "quarterly delivery volume of about 500,000"—after the expiration of the electric vehicle tax credit policy, this move is significant for stimulating demand for its models. However, Ives also stated that Wedbush is relatively disappointed with the extent of this price reduction, as the new prices are only $5,000 lower than the previous Model 3 and Model Y. Nevertheless, Wedbush still gives Tesla an "outperform" rating, citing the company's significant advantages in valuation logic in the artificial intelligence (AI) field.
Futurum Equities Chief Market Strategist Shay Boloor believes that Tesla's announced measures are essentially just a "price leverage" operation and do not constitute influential product catalysts. He warned, "I don't think this move will significantly unleash new market demand."
Camelthorn Investments advisor Shawn Campbell stated that the extent of this price reduction may still be insufficient. In an interview, he said, "In the long run, this news does not address the challenges posed by low-cost competitors in the global market. In my view, Tesla needs to launch an electric vehicle priced below $30,000." The head of the Seeking Alpha investment team, Daniel Jones, took a more macro perspective and rated Tesla as a "strong sell," reasoning that he believes Tesla's current valuation is linked to "irrational exuberance" and lacks reasonable support.
In terms of stock price, Tesla rose 1.29% on Wednesday. Currently, the company's market capitalization stands at $1.46 trillion, exceeding the combined market capitalization of Toyota (TM.US), Honda (HMC.US), General Motors (GM.US), Ford, Nissan, and Stellantis (STLA.US)
