Investment bank Bernstein released an investment report today, expressing dissatisfaction with Tesla’s decision not to develop a Model 2 model priced at $25,000 this year.
Bernstein believes that without a model priced to meet mass market demand, it is difficult for us to understand how Tesla will increase production by more than 50% per year after 2023.
A 50% annual increase in sales means Tesla could sell 3 million vehicles in 2024 and nearly 5 million in 2025. Bernstein doesn’t think there will be millions of consumers every year willing to spend more than $100,000 for a Model X, nearly $100,000 for a Model S, or even $45,000 for a relatively inexpensive Model 3.
Given that Tesla is not expected to launch a $25,000 model before 2025, Bernstein sees the long-term 50% growth in Tesla vehicle sales as an impossible pipe dream. As a result, Bernstein rates Tesla stock as “underperform,” with a price target of just $300.