It is probably not a surprise that electric vehicle giant Tesla (TSLA) has plans to release a new “urban transport” vehicle. It is also not a surprise that it will likely be “something cooler” than a minivan. While Tesla’s definition of cool has not always been a winner—we need only consider the Cybertruck for proof of that point—it certainly can do cool. But investors seem a bit concerned, and sent Tesla shares down modestly in Monday afternoon’s trading.
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Forget margin or options. Here's how the pros trade TSLATesla CEO Elon Musk, likely realizing that Tesla’s vehicle line was down to a handful of vehicles after decommissioning several models, recently revealed plans for an “urban transport” Tesla. It was part of a line that would encompass two key points: heavy-duty trucks and high-passenger-density urban transport.
The Tesla Semi stepped in to handle the heavy-duty part, and early reports suggest it does that job wonderfully. But the urban transport is still quiet, at least until recently. While Tesla has been seen moving away from consumer vehicles, having scrapped the Model S and the Model X in favor of making Optimus robots, there are still vehicles being made. The Model 3 and Model Y are still in play, as is the Cybertruck and, eventually, the Roadster. Add on this urban transport vehicle and the electric vehicle line is almost as robust as it once was.
The $8 Billion Time Bomb
Tesla has another problem ahead that could prove difficult for Tesla owners, as well as for future Tesla buyers. That problem is depreciation, and it represents an $8 billion time bomb, reports note. Teslas do not hold their value for very long; a Model 3 holds just 23% of its original value after a mere six years. This suggests a reason that Tesla may be moving away from electric vehicles in general, making the product line a bit more specialized than general-use vehicles.
With almost 800,000 electric vehicle leases set to expire all at once in 2028, it could be a banner year for used Teslas. Though some may not want to gamble on a vehicle where the battery will cost more than the vehicle itself does to replace. Any dealership with a used Tesla on its lot, though, may take the worst of this, thanks to those depreciation-related losses.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 11 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 39.62% rally in its share price over the past year, the average TSLA price target of $399.33 per share implies 10.83% upside potential.
