Tesla (TSLA) CEO Elon Musk appears to have thrown cold water on the company’s plans to deliver a more affordable electric vehicle that costs around $25,000 to purchase.
A more affordable, mass-market electric vehicle has long been seen by analysts and investors as critically important to boosting Tesla’s sales in the face of rising competition from other automakers. With the cheapest Tesla Model 3 currently costing nearly $40,000, analysts and investors have been imploring the company to come up with a cheaper vehicle.
Expectations for a lower-priced Tesla have been so high that when the Reuters news agency reported this past spring that Tesla had canceled its plans for a $25,000 electric vehicle, the company’s stock plunged, prompting Musk to take to social media and dispute the report.
Pivot to Self-Driving Vehicles
Tesla’s sales could use a boost. In this year’s third quarter, the company delivered 462,890 electric vehicles, missing analyst targets and sending the company’s stock down 4% as a result. Tesla is facing rising competition both in its home market of the U.S. and in China, the world’s biggest car market.
Yet, Musk seems to have confirmed that Tesla is no longer planning to build a mass-market electric vehicle. Responding to an investor who asked, “When can we expect Tesla to give us the $25,000 non-robotaxi regular car model?” Musk said, “We’re not making a non-robo… Basically, I think having a regular $25K model is pointless. It would be silly.”
The latest comments from Musk come as Tesla shifts its focus to self-driving robotaxis. In recent months, Musk has promoted plans for Tesla’s robotaxis and autonomous vehicles, saying they are the future of the automotive industry. In October, Tesla held a robotaxi event where the company unveiled some details of its plans for self-driving vehicles. The event garnered mixed reviews from analysts and investors.
TSLA stock has risen 1% so far this year.
Is TSLA Stock a Buy?
Tesla stock has a consensus Hold rating among 35 Wall Street analysts. That rating is based on 11 Buy, 16 Hold, and eight Sell recommendations made in the last three months. The average TSLA price target of $207.83 implies 17.36% downside risk from current levels.
