Tesla
quietly has relaunched a rear-wheel-drive version of its popular Model Y crossover-sized vehicle in the U.S., and at a lower price.
It’s a good deal for car buyers. For investors, the implications are mixed.
The new version of the EV maker’s best-selling car starts at $43,990, according to the company’s website. It replaces the all-wheel-drive Model Y, which cost $3,750 more and which
Tesla
stopped offering recently. Tesla (ticker: TSLA) stopped selling the rear-wheel-drive version in the U.S. in 2021 but it remained available in Europe and China.
It isn’t a price cut or about growing inventories, but the relaunch does raise a question about vehicle demand. Tesla stopped offering its lowest-priced model when demand was highest. It’s better to make more expensive, higher profit margin vehicles if capacity is constrained.
Capacity is no longer constrained though. Tesla has cut prices several times around the globe to boost demand and inventories of non-Tesla EVs are at 97 days worth of sales in the U.S. Traditional vehicles are at 57 days. U.S. EV sales are hitting records, but it isn’t as easy to sell EVs today as it was in 2021
The Model Y’s reappearance in the U.S. came just hours after Tesla’s disappointing third-quarter deliveries, which were released Monday. The company delivered 435,059 cars, lower than the 455,000 consensus expected by analysts. A few weeks ago, estimates were as high as 473,000 vehicles, according to FactSet.
Tesla also updated its Model Y in China earlier this week, Reuters reported. The update includes a new wheel design but the starting price remained unchanged at around $36,000.
Tesla also introduced an updated version of the Model 3 sedan in China and Europe recently. Wall Street expects an updated version of the Model 3 in the U.S. eventually.
Updated models are another time-tested way for auto makers to boost demand. Most car models change a little from year to year and, once in a while, get a complete overhaul by auto makers.
Tesla
stock tumbled in premarket trading Monday after the weak delivery numbers were released before closing the trading session up 0.5%. The stock pointed 0.5% lower ahead of the open on Tuesday.
S&P 500
and
Nasdaq Composite
futures are flat.
Coming into Tuesday trading, Tesla stock is up about 104% year to date, but down about 10% over the past three months.
Write to Callum Keown at [email protected]
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