This reiterates what I’ve said previously about the more affordable $Tesla(TSLA.US) Model Y due out in 4Q , and which may be unveiled tomorrow. $Tesla(TSLA.US) +2.9% in early trading.
I view the new more affordable (~$35K) Model Y as a non-catalyst, as it seems to be a stripped down version of the existing Model Y. Unless the cheaper Model Y turns out to be a new form factor (e.g hatchback) sufficiently differentiated from the existing Model Y to generate incremental volume net of cannibalization, it is likely to be a repeat of 2023-2024 when TSLA cut prices (and costs), earnings ests plunged by 50% and TSLA got zero incremental volume. TSLA has underperformed NDX and the Mag 7 for three years now as earnings ests have been cut repeatedly. The more affordable Model Y appears to be missing the front light bar and has a solid rather than a glass roof. The battery is likely smaller and the wheels aren’t as sporty. We expect the seats to be cloth and the stereo/sound system to be cheaper. It will likely come in RWD only. The existing Model Y starts at $44,990 and the existing Model 3 starts at $42,490. We believe the cheaper Model Y will start at around $35K. IMO this will generate little incremental volume net of M-3 / M-Y cannibalization. From Tesla’s X account over the weekend:
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