Tesla Reduces Price on Model S, Model X

Jeannie Matthews
May 24, 2019

As a result of weakness in China, Morgan Stanley expects Tesla to sell an average of 165,000 vehicles in China annually between 2020 and 2024, leading to sales of approximately United States dollars 9 Billion each year if product value is at USD 55,000.

But Ives said that "mixed signs of Model 3 demand" are making it more challenging for Tesla to reach Musk's production targets.

Tesla on Monday reduced the prices of of the Model S and Model X.

Tesla shares slipped on Monday after Wedbush analysts slashed their price target for the stock.

Tesla Inc Chief Executive Officer Elon Musk informed workers on Thursday that he will boost scrutiny of the company's expenses in his recent initiative to slash costs at the electric automaker.

With the price cuts, the Model S now starts at $71,250 while the X starts at $71,950.

We believe Tesla may have over-saturated the retail market for BEV sedans outside of China. "Even the pro-Tesla propaganda at electrek couldn't help but admit that ".it's also becoming hard to navigate Tesla's price structure because it changes so often".

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Analyst Adam Jonas said Tesla's rising debt pile and geopolitical exposure, including the risk that Chinese demand for the company's cars could suffer, had driven him to slash his "bear-case" valuation to $10 from a previous $97.

Wall Street seems to be piling onto the struggling stock.

Asides from the claims by Irwin, no other sources have indicated Apple had attempted to acquire Tesla, although the move to take over the American automotive company would fit nicely with the company's rumored plans to develop an Apple-branded self driving electric vehicle. Moreover, on a sustained basis, Tesla is looking to produce almost 10,000 vehicles per week.

"We give Tesla credit for tapping into the world's largest EV market for a number of years" in China, Jonas said.

By comparison, the average spread on corporate bonds rated "B" - roughly the same as "B-" rated Tesla - is 442 basis points, according to ICE BofAML bond index data. Jonas kept his main price target for the stock at $230 and also has a bull-case valuation of $391. Audio obtained by the Financial Times shows Musk telling investors at the time: "We don't expect to spend this capital".

Thus Tesla shares have declined in 10 of the last 11 trading days.

Tesla's share prices now sits at $204.77 at the time of the writing of this article.

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