Car/Auto InsuranceStock Market

Tesla’s Price Slash To Boost Volume Growth By 53% This 2023

Tesla's Price Slash To Boost Volume Growth By 53% This 2023

Tesla’s Price Slash To Boost Volume Growth By 53% This 2023

Tesla’s Price Slash To Boost Volume Growth By 53% This 2023

According to Bank of America, Tesla’s recent price reductions for its automobiles will result in more rise in sales volume in 2023.

The Model 3 sedan and Model Y SUV will have their prices reduced in January by between 6% and 20%, and while this would reduce margins, BofA strategists said in a note on Tuesday that this may lead to a 53% rise in volume this year.

ALSO, READ Tesla CEO Elon Musk Lost Nearly Twice Total Value Of BMW In 2022 So Far

That would take the business past CEO Elon Musk’s target of 50% and is more than treble the Wall Street firm’s previous estimate of 17% growth.

INVEST IN IRAs, SECURE YOUR FUTURE

Tesla’s Price Slash To Boost Volume Growth By 53% This 2023

“This pushes revenue to $100bn in 2023, up 18% from our prior model,” strategists wrote. “Based on the adverse impact of price cuts offset by an average incremental margin on the increase in sales that we estimate at 30%, our earnings estimates move moderately lower in 2023 and our price objective is now $130 (was $135).”

Tesla looks poised to make 10% to 20% less per car sale, and the bank forecasted that additional incremental cuts could follow over the next two years. Analysts trimmed earnings-per-share estimates for 2023 and 2024.

ALSO, READ Tesla Makes $64 Million From Its Bitcoin Sale 

BofA noted that Tesla remains fairly valued and maintained its neutral rating on the stock, which climbed 5.9% to $129.65 on Tuesday.

Strategists pointed out that the company’s self-funding status is unique among EV competitors, but less notable among legacy automakers. Tesla faces near-term obstacles including a downbeat macro environment of higher interest rates and a looming recession, as well as potential risks to the broader EV market.

Tesla’s Price Slash To Boost Volume Growth By 53% This 2023

Altogether, along with Musk’s distractions associated with his acquisition of Twitter, BofA said a neutral stock rating is “appropriate.”

Also on Tuesday, longtime bull Jefferies lowered its price target for Tesla by 49% to $180 from $350, but kept a Buy rating on the stock, arguing that the company’s recent price reductions will assist a broader objective of making electric vehicles more accessible.


AllInsuranceHUB is a blog for everyone who seeks an informative, educative, and knowledge-based online insurance and investment community. We share Biographies, Top-notch investment tips, finance news, insurance policy details and much more. You can read and share thoughts, ideas, and opinions on the finance market and get real-time updates from around the globe.

 

 

Website | + posts

I Am a financial analyst, Entrepreneur, Blogger and Business model. With 15 years' Consultancy Experience.

IBEH C. JOE

I Am a financial analyst, Entrepreneur, Blogger and Business model. With 15 years' Consultancy Experience.

Leave a Reply

Back to top button
%d bloggers like this: