Sudden Tesla Announcements Raise Analyst Concerns About Demand For Cars

Breitbart | 3/3/2019 | Staff
dewbydewby (Posted by) Level 4
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Following the settlement of a $920 million bond payment, Tesla announced a $35,000 version of its Model 3 car along with its new Model Y vehicle, but the sudden timing of the announcements have raised concerns amongst analysts about consumer demand for Tesla cars.

Tesla was recently forced to pay off $920 million in debt after its share price was unable to reach the level at which the debt would convert into shares of the company as opposed to cash repayment.

Time - Tesla - Model - Vehicle - Analysts

At the same time, Tesla announced a $35,000 Model 3 vehicle leading many analysts to worry about the possibility of a shrinking profit margin on Tesla vehicles; while Tesla also announced that it would be closing its global retail store network and planning to only sell vehicles online. Now, the company has announced a new SUV vehicle titled the Model Y, which has led many analysts to question the demand for Tesla vehicles.

Hot on the heels of these big changes, Elon Musk has announced a brand new vehicle in the Tesla lineup — the Tesla Model Y.

RBC - Analyst - Joseph - Spak - Timing

RBC analyst Joseph Spak stated that the timing of these announcements is a reason for concern saying: “A Model Y announcement so shortly after the $35k [Model 3] suggests that consumer reaction toward the $35k Model 3 may not have been as strong as the company had hoped. We believe there has been a fall-off in U.S. demand and softer than expected demand in Europe/China.”

The Model Y is set to be unveiled on March 14...
(Excerpt) Read more at: Breitbart
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