Tesla (TSLA) may have picked the right time to go ‘mass market’ and build a cheaper EV as the Iran war shock tempts drivers away from their gas-guzzling cars.
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Trade TSLA with leverageCheaper EV Could Be a Huge Catalyst
According to Danni Hewson, head of financial analysis at AJ Bell, Tesla’s plans to deliver a more affordable EV could be a huge catalyst for the group. Her comments followed reports that the vehicle will be a completely new model, not a variant of the Model 3 or Model Y. It is understood that Tesla has recently reached out to suppliers to discuss manufacturing plans and key specifications for the compact SUV, signaling that the project is in its early stages of development.
“Investors have been left repeatedly disappointed by the company’s failure to launch an EV that could compete with cheaper Chinese models, instead focusing on high-tech like robo-taxis and robotics,” said Hewson. “It enjoyed huge early success as a premium player, but its sales have come under increasing pressure as competition in the EV space increased. Exploring new options and developing a cheaper small car which can be built using existing infrastructure makes sense and would allow the brand to draw in an entirely new consumer.”
Pump Prices Causing Headaches
She said that with prices at the pump causing headaches for many motorists, switching to an EV might have moved up the to-do list for many people and Tesla could grab a chunk of that business.
“Becoming more mass market would represent a natural evolution rather than rewriting the company’s entire business model,” she said.
Tesla’s shares have come under pressure over the last 12 months because of the fragile performance of its EV unit. That’s partly been down to boss Elon Musk’s flirtations with right-wing politics but also competition from China and a perception that it is falling behind rivals in its push towards full self-driving technology.
Even though Musk has talked up the potential of new projects like humanoids, EVs still play a major part in overall business revenues and profits. Indeed, they still comprised 72% of TSLA gross profits in 2025.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 13 Buy, 11 Hold and 8 Sell ratings. Its highest price target is $600. TSLA stock’s consensus price target is $392.63, implying a 13.60% upside.
