American electric vehicle (EV) giant Tesla (TSLA) on Friday launched the Model 3 Standard, a low-cost variant of its Model 3 electric sedan, in Europe. However, TSLA stock held steady despite the latest effort to win back customers from Chinese and European rivals.
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Tesla has been seeing volatile sales in the region, even as its key Chinese competitor, BYD (BYDDY), and European producers such as Volkswagen (VWAGY) and Renault (RNLSY) have been steadily growing their sales.
Tesla Launches New Variant to Fight Falling Sales in Europe
In October and November, new Tesla registrations — a close proxy for sales — fell across several key European markets, including the U.K. However, Tesla is looking to the newer and cheaper variant of the Model 3, which entered the U.S. market earlier in October.
According to Tesla’s website, the newer variant costs over $44,000 in Germany and almost $48,000 in Sweden. Based on currency conversion, it appears the cheapest in Norway, where it costs over $32,000. Norway is one of Tesla’s earliest markets in Europe.
Tesla’s sales had briefly rebounded in Europe in September after it launched a revamped version of its Model Y sport utility vehicle in the region. The newer SUV model featured a new front and back design, new wheels and tires, and carbon fiber pieces to improve aerodynamics.
Can Model 3 Standard Be the Magic?
It remains to be seen whether the Model 3 Standard will be enough to convince European buyers to increase their patronage of the EV maker. This is particularly important as a recent study by the Global EV Alliance found that avoidance of the Tesla brand over CEO Elon Musk’s recent political involvement is higher in advanced countries, with Germany and Norway leading the pack in Europe.
Moreover, a new report, which is widely followed in Germany and beyond, rated Tesla’s Model 3 as having one of the lowest failure rates of mechanically examined cars. The Model Y also came in with a failure rate of 17.3%, almost three times higher than the standard failure rate.
Is TSLA a Buy Now?
On Wall Street, Tesla’s shares continue to have a Hold consensus rating from analysts. This is based on 13 Buys, 11 Holds, and 10 Sells issued by 34 analysts over the past three months.
Moreover, at $383.04, the average TSLA price target indicates approximately 16% downside risk.
