What analysts are saying about Tesla's lowered Model Y and Model 3 prices

[Tesla electric car retail store and company brand logo sign]

Tesla (NASDAQ:TSLA [https://seekingalpha.com/symbol/TSLA]) is in the spotlight after the company unveiled cheaper versions of the Model 3 and Model Y. The price tag of both vehicles will still be above the $30K level that was once promised for the mass market segment. Of course, the expiration of the electric vehicle tax credit has created more pressure on manufacturers to focus on affordability.

Deepwater Asset Management analyst Gene Munster said "bravo" to Tesla (NASDAQ:TSLA [https://seekingalpha.com/symbol/TSLA]) for cutting the price of the Model Y by 11% to $40K and the Model 3 down to $37K from $39K. Munster thinks the pricing move means the 16% delivery growth that Wall Street is looking for in 2026 is more likely. "Most were expecting a slimmed down Model Y. What we got was basically the same Model Y, with limited color and wheel options," he noted.

Munster pointed out that the new Model Y and Model 3 pricing could put pressure on competitor models between $30K and $35K, including the Nissan Leaf, Hyundai Ioniq 5, and Ford Mustang Mach-E. "For Hyundai, Ford, and Nissan, the challenge isn’t price, it’s software. As Full Self-Driving and onboard compute capacity become as central to the EV experience as range, Tesla’s software advantage continues to widen," highlighted Munster.

Wedbush Securities analyst Dan Ives thinks the launch of a lower-cost model represents the first step of Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) to getting back to a ~500K quarterly delivery run-rate, which is seen as important in stimulating demand for its fleet after the EV tax credit expiration. However, Ives said the firm is relatively disappointed with the launch, as the price point is only $5K lower than prior Model 3s and Ys. Still, Wedbush has an Outperform rating on Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) due to what it sees as an incredible AI valuation story.

Futurum Equities Chief Market Strategist Shay Boloor said the Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) announcement was basically a pricing lever and not much of a product catalyst. "I don't see it as unlocking new demand at scale," he warned.

Camelthorn Investments advisor Shawn Campbell said the pricing move may not be enough. "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," he told Reuters.

On Seeking Alpha, Investing Group Leader Daniel Jones [https://seekingalpha.com/article/4828275-teslas-crash-earlier-this-year-is-precursor-of-worse-things-to-come] took a broad view and tagged Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) with a Strong Sell rating due to valuation he thinks is tied to irrational exuberance.

Shares of Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) were up 0.4% in premarket action after sliding 4.5% on Tuesday. The market cap on Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]) stands at $1.4 trillion, which makes the company more valuable than Toyota (TM [https://seekingalpha.com/symbol/TM]), Honda (HMC [https://seekingalpha.com/symbol/HMC]), General Motors (GM [https://seekingalpha.com/symbol/GM]), Ford (F [https://seekingalpha.com/symbol/F]), Nissan (OTCPK:NSANY [https://seekingalpha.com/symbol/NSANY]), and Stellantis (STLA [https://seekingalpha.com/symbol/STLA]) combined.

MORE ON TESLA

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* Tesla's Comeback: Why Skeptics Like Me Are Becoming Believers (Upgrade) [https://seekingalpha.com/article/4827623-tesla-stock-comeback-why-skeptics-like-me-are-becoming-believers-upgrade]
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* Tesla offers a new Model Y version in the U.S. priced below $40K; Model 3 falls below $37K [https://seekingalpha.com/news/4502459-tesla-offers-a-new-model-y-version-in-the-us-priced-below-40k]
* Tesla's teasers hint at a lower-cost variant of bestselling Model Y - report [https://seekingalpha.com/news/4502182-teslas-teasers-hint-at-a-lower-cost-variant-of-bestselling-model-y---report]