Tesla (NASDAQ:TSLA) has launched a rear-wheel drive variant of its Model 3 long-range vehicle, according to the EV maker’s website. The company has priced this variant at $42,490, which is $5,000 less than the all-wheel drive version.
Interestingly, Tesla did not change the prices for the base variant of the Model 3, the long-range all-wheel drive, and performance variants. Despite this, Tesla’s Q2 vehicle deliveries declined by 4.8% year-over-year to 443,956. However, this figure still surpassed consensus estimates of 436,000 vehicles, thanks to the price cuts and incentives.
In other news, Tesla’s stock continued to trend downward following reports that the company’s robotaxi event, initially set for August 8, may be delayed. According to a Bloomberg report, it is likely that the event might be pushed back to October to develop autonomous vehicle prototypes.
UBS Analyst Downgrades TSLA
Following the news, UBS analyst Joseph Spak downgraded TSLA to Sell from Hold but raised the price target to $197 from $147, stating that the stock has risen “too much, too soon” on optimism over its artificial intelligence plans.
The analyst pointed out that “if market enthusiasm for AI wanes, Tesla’s valuation could suffer.” Spak cited the risk that growth opportunities may take longer to materialize or not occur at all, noting the stock trades at over 80 times its forward earnings.
UBS’s downgrade reflects growing concerns about AI-related valuations, as seen in a recent selloff of big tech shares. Furthermore, according to Spak, Tesla faces a weaker outlook for electric car sales and earnings. The analyst noted that recent AI enthusiasm has inflated Tesla’s valuation, requiring even larger opportunities to justify a Buy rating.
Is Tesla a Buy or Sell?
Analysts remain sidelined about TSLA stock, with a Hold consensus rating based on 13 Buys, 14 Holds, and eight Sells. Over the past year, TSLA has declined by more than 10%, and the average TSLA price target of $194.17 implies a downside potential of 19.4% from current levels.
