Tesla (TSLA) stock has fallen about 5% over the past week after the company raised prices on some higher-end Model Y vehicles in the U.S., but Evercore believes the bigger issue is slowing demand. In a new note, the firm maintained its Hold rating and $300 price target on the stock, warning that weaker U.S. demand could lead to lower deliveries and softer earnings ahead.
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For context, Tesla increased prices on several Model Y trims over the weekend. The Premium all-wheel-drive and Premium rear-wheel-drive trims each rose by $1,000, while the Performance version saw a smaller $500 increase.
The move attracted attention because Tesla has spent much of the past two years cutting prices and offering incentives to support demand and protect market share.
Why Evercore Is Cautious on Tesla
Following the price increase, Evercore said higher gasoline prices may improve the overall appeal of EV ownership and give Tesla some room to stabilize pricing. However, the firm believes the company is now operating in a much weaker U.S. demand environment than in previous years.
The firm estimates Tesla’s annual U.S. demand run rate has fallen to roughly 500,000 vehicles, down about 15% to 20% year-over-year and nearly 30% to 40% below peak levels.
Because of that softer demand environment, Evercore now expects Tesla to deliver around 400,000 vehicles in the second quarter. The firm also projects Q2 earnings per share of about $0.50, which it described as Tesla’s “new quarterly run rate.”
The comments come at a time when investors are closely watching Tesla’s pricing strategy, margins, and delivery trends. In recent years, the company has relied heavily on price cuts and incentives to support sales as competition in the EV market has increased.
While some investors may see the latest price hikes as a sign that Tesla is trying to protect margins, others worry they could add more pressure on demand if buyers pull back.
Is Tesla a Good Stock to Buy?
According to TipRanks, TSLA stock has received a Hold consensus rating, with 12 Buys, 12 Holds, and five Sells assigned in the last three months. The average price target for Tesla shares is $403.86, implying a 3.35% downside from the current price.
