Tesla Slashes Model Y Interior Price as Market Competition Heats Up

Tesla has recently reduced the cost of the seven-seat interior option for the Model Y Long-Range. The option is now available for an additional $3000 on top of the base price, compared to the previous $4000 increment. The base model of the mid-size SUV, which comes with a five-seat interior, is priced at $49,990 and qualifies for a $7,500 federal tax credit.

Earlier this month, Tesla cut prices of some Model Y and Model 3 vehicles in the U.S. ahead of its first-quarter results. Since January, the company has implemented price cuts of up to 19.7%. These price reductions have facilitated better first-quarter deliveries for Tesla, placing increased pressure on rival electric vehicle makers to decrease costs to maintain competitiveness. However, Tesla delivered only 10,695 units of its Model Y/3 vehicles in the first quarter, compared to the 17,147 units sold in the previous quarter.

Tesla CEO Elon Musk has previously emphasized the importance of the company's progress in self-driving technology. He believes that many people underestimate the value in Tesla eventually pushing self-driving capability to its fleet of millions of vehicles through over-the-air software updates. Investment firm Ark Invest, which holds over $1 billion worth of Tesla shares, shares this sentiment. The firm has set a $2,000 price target on the stock, largely based on Tesla delivering on its promise of releasing its robotaxi service to its existing fleet. Ark Invest predicts that Tesla will launch its robotaxi service in late 2024, with software updates enabling millions of cars produced since 2016 to become fully self-driving.

Since its initial public offering (IPO) in June 2010, Tesla has experienced significant growth. A $10,000 investment in Tesla on its IPO date would be worth around $1.16 million as of April 6. ARK Investment Management, one of the larger institutional owners of Tesla shares, predicts that shares of the electric vehicle company could be worth $2,000 in 2027, with a bull case scenario of $2,500. ARK's bear case on Tesla suggests a 25% chance the stock could be worth $1,400 (or less) in 2027, still implying a more than six-fold increase from current levels.

Autonomous transportation is expected to play a significant role in these potential gains. ARK’s research indicates that Tesla's prospective robotaxi business line will contribute 67% of expected enterprise value and 64% of expected EBITDA in 2027. Furthermore, ARK highlights Tesla's vertical integration strategy and Dojo training supercomputer as key competitive advantages.

In recent trading, Tesla stock opened at $160.19, with a market capitalization of $507.72 billion, a price-to-earnings ratio of 47.11, a PEG ratio of 1.98, and a beta of 2.00. Tesla has a 52-week low of $101.81 and a 52-week high of $318.50. The electric vehicle producer reported $0.85 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates. Tesla had a net margin of 13.66% and a return on equity of 27.29%. The firm posted revenue of $23.33 billion for the quarter, compared to analyst estimates of $23.36 billion.