Piper says Tesla price cuts ‘clear indicator’ that capacity outstrips demand

Piper Sandler notes Tesla announced another round of price cuts over the weekend, impacting “essentially all models, in all global regions” and says these cuts are “a clear indicator that Tesla’s production capacity has outstripped demand.” In the firm’s view, a coincident price cut on full self-driving software from $12,000 to $8,000 is “even more material to Tesla’s earnings potential,” the analyst tells investors. Tesla reports earnings tomorrow afternoon, “so for now, we’ll refrain from updating our model to reflect the price cuts,” added the firm, which has an Overweight rating and $205 price target on Tesla shares.