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Tesla shares gain after Model Y price hike in US, Europe, ET Auto



<p>Tesla Model Y</p>
Tesla Model Y

Shares of Tesla jumped nearly 7% on Monday after the automaker announced price increases for its Model Y electric vehicles across some European countries and the United States.

Tesla said prices of its Model Y vehicles will be increased by approximately 2,000 euros (USD 2,177) in some European countries effective March 22, according to a company statement on Saturday. It had announced on Friday price hikes for all Model Y cars in the U.S. by USD 1,000 effective April 1.

Tesla shares rose as high as USD 174.72, up nearly 7%, on Monday following the announcements, making it the biggest percent daily gain in more than a month after sliding for two weeks. The stock is now on track for its second straight day of gains after dropping to a near 10-month low last week. It was last up 6.3% at USD 173.92.

“In light of persistently high Model Y inventory, we view Tesla’s preview of future price increases as an attempt to boost sales this month, rather than a sign of solid demand,” said Deutsche Bank analysts led by Emmanuel Rosner in an investor note on Monday.

The median estimate of the 49 analysts currently covering Tesla’s shares is USD 193, down from USD 211.50 a month ago, and their average recommendation is “hold,” according to LSEG data.

Goldman Sachs analysts slashed their 12-month price target on Tesla’s stock to USD 190, down from USD 220, citing obstacles to its ramp in Model 3 production and a manufacturing downtime at its Berlin gigafactory following an arson attack.

Tesla’s sales will also be impacted by reduced electric vehicle subsidies in Europe, rising competition in China – which is the company’s second-largest market after the U.S. – and slowing demand, the analyst led by Mark Delaney wrote in an investor note on Sunday.

“While we continue to believe that Tesla is well positioned for longer-term growth given its strong position in the EV and clean energy markets … we believe that softer near-term EV market conditions are weighing on earnings,” the analyst said.

  • Published On Mar 19, 2024 at 11:40 AM IST

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