New York, NY – Tesla’s stock sees a significant surge of nearly 7% on Monday following the announcement of price increases for its Model Y electric vehicles in certain European countries and the United States. The company revealed that prices for the Model Y will be raised by about 2,000 euros in selected European nations starting March 22, along with a $1,000 increase for all Model Y cars in the U.S. effective April 1.
The spike in Tesla’s shares, climbing to $174.72, marks the largest daily gain in over a month after a recent decline. This rise indicates a potential turnaround for the stock, which had dropped to a 10-month low just last week. Analysts from Deutsche Bank suggest that the price hikes could be a strategy to stimulate sales amid high Model Y inventory, rather than a reflection of strong demand.
Despite the optimistic market response, the average consensus among 49 analysts covering Tesla predicts a lower median estimate of $193, down from $211.50 a month earlier. Additionally, Goldman Sachs analysts have revised their 12-month price target for Tesla’s stock to $190, down from $220, citing challenges in Model 3 production ramp-up and operational disruptions at Tesla’s Berlin gigafactory due to an arson incident.
Further impacting Tesla’s sales outlook are shrinking electric vehicle subsidies in Europe, growing competition in China (the company’s second-biggest market after the U.S.), and a general slowdown in demand. Analysts warn that while Tesla remains well-positioned for long-term growth in the EV and clean energy markets, current market conditions could put a strain on earnings.
The recent developments in Tesla’s pricing strategy and market outlook suggest a complex landscape ahead for the electric vehicle manufacturer. As the company navigates through various challenges and opportunities in different regions, investors and analysts closely monitor Tesla’s stock performance for signals of future growth and stability.