Electric vehicle (EV) maker Tesla (TSLA) finally launched the much-awaited lower-cost versions of its best-selling Model Y SUV and Model 3 Sedan, with starting prices of $39,990 and $36,990, respectively. However, the pricing of these “affordable” versions failed to impress investors, with TSLA stock falling more than 4% on Tuesday. Some analysts and industry experts argue that the prices of the new models are still high and may not be attractive to buyers in a highly competitive EV market.
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According to Tesla’s website, both the cheaper EVs can be ordered immediately, with deliveries scheduled to start between December 2025 and January 2026 for many locations.
Experts Weigh in on Tesla’s Affordable EV Models
Tesla CEO Elon Musk has been discussing the launch of mass-market models for several years. However, he reportedly cancelled the plan for a new $25,000 EV model and chose to develop lower-priced versions of existing models to spur demand amid intense competition.
However, some analysts and industry experts believe that the launch of cheaper versions of Model Y and Model 3 might fail to boost Tesla’s sales, as their pricing still seems expensive.
According to Reuters, Wedbush analyst and Tesla bull Daniel Ives stated that he was disappointed that the new EV launches were only about $5,000 cheaper than the next-level trims of the models.
While some analysts are optimistic that the cheaper versions will help Tesla compete better in key markets, others are not pleased as they expected the company to price the new models below $30,000. For instance, Shawn Campbell, an advisor at Camelthorn Investments, is unsure about whether the cheaper versions will boost demand. “Longer term, this news doesn’t solve the problem posed by lower cost Chinese competitors in global markets. In my opinion, Tesla needs a sub-30k EV,” said Campbell.
Despite the launch of cheaper EVs, Tesla may remain under pressure in Europe due to backlash related to Musk’s political views and competition from several electric and plug-in hybrid models priced below $30,000.
Is TSLA Stock a Buy, Sell, or Hold?
Given intense competition in EV markets and margin pressures, Wall Street is sidelined on Tesla stock. The Hold consensus rating on Tesla stock is based on 14 Buys, 13 Holds, and nine Sells.
The average TSLA stock price target of $350.58 indicates a downside risk of 19% from current levels. TSLA stock has risen 7.2% year-to-date.
