(Reuters) -Tesla unveiled more affordable versions of its best-selling Model Y SUV and its Model 3 sedan on Tuesday at $39,990 and $36,990, respectively, as the electric-vehicle maker seeks to reverse falling sales and waning market share amid rising competition.
MARKET REACTION:
Tesla shares fell 3% in afternoon trading.
The S&P 500 was down 0.4% while the Nasdaq fell 0.7%.
COMMENTS:
SETH GOLDSTEIN, ANALYST, MORNINGSTAR, CHICAGO:
“I think a sub-$40,000 price will help Tesla grow deliveries as it opens the Model 3 and Model Y up to more consumers who are not able or willing to pay up for a higher-priced vehicle.”
SHAY BOLOOR, CHIEF MARKET STRATEGIST, FUTURUM EQUITIES:
“It’s basically a pricing lever and not much a product catalyst. Tesla’s done this play before where they bring out a ‘Standard’ trim a few months after launch to hit a lower price point and keep the lineup fresh.”
“The $39.9K Model Y undercuts the psych $40K barrier and makes Tesla’s best-selling crossover more accessible, but I don’t see it as unlocking new demand at scale. You’ll get some volume lift but mostly from buyers trading down from the premium trims, so it’s more mix-shift than incremental growth.”
“Big picture, the cars remain the cash engine; the real story for Tesla is still autonomy and robotics.”
(Reporting by Peter Henderson)
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