EV (electric vehicle) giant Tesla (NASDAQ:TSLA) rolled out cheaper versions of its Model S and Model X. The move comes at a time when the EV titan is lowering its average selling price to drive volumes amid rising competition. The lower-cost versions of both models are $10,000 less than the regular price.
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The lower-cost, or Standard version, of the Model S, starts at $78,490, compared to $88,490 for the regular one. However, it has a lower driving range of 298–320 miles compared to 375–405 miles for the regular Model S.
At the same time, Model X’s Standard version starts at $88,490 versus $98,490 for the regular one. The cheaper variety offers a driving range of 255–269 miles compared to 330–348 miles for the regular Model X.
Tesla has been aggressively cutting prices, especially in China, to push volumes. Further, the launch of these low-priced versions will likely support volumes. Nevertheless, lower average selling prices have taken a toll on Tesla’s margins, which have consistently declined over the past several quarters.
While Tesla is pushing volumes over margins, let’s look at what the Street recommends for TSLA stock.
Is Tesla a Buy, Hold, or Sell?
Tesla stock reversed some of its gains over the past month (down over 17% in one month) despite the company delivering stronger-than-expected second-quarter results on July 19 and crushing the Street’s EPS estimates.
Moreover, with ongoing pressure on margins, TSLA stock has received 10 Buy, 13 Hold, and five Sell recommendations for a Hold consensus rating on TipRanks. Analysts’ average price target of $253.77 implies 8.93% upside potential from current levels.
