In a recent announcement that has stirred the auto industry, Elon Musk, CEO of Tesla Inc. (NASDAQ:TSLA), has hinted at the possibility of a Tesla Model Y priced under $20,000. However, experts have given mixed reactions to the revelation.
What Happened: Musk shared his vision of a more affordable Tesla Model Y during the company's 2024 Annual Stockholder Meeting, suggesting that such a vehicle could potentially sell millions of units, Forbes reported on Monday.
"Figuring out ways to make more affordable vehicles is really like the game changer," Musk stated.
Musk emphasized the importance of affordability in Tesla's future, acknowledging that while many people aspire to own a Tesla, the high price point is a deterrent. He reiterated Tesla's commitment to making their vehicles more accessible.
Industry insiders have shared mixed responses to this announcement. An anonymous executive from a major American transportation company stated that the concept of a more affordable car is not new.
"I don't think they'll make a new car that's cheap out of whole cloth but they'll find a way to make current cars cheaper," he said.
Sam Fiorani, an analyst at AutoForecast Solutions, expressed that a $20,000 Tesla would involve "substantial compromises."
"The company currently makes less money per vehicle than a number of mainstream automakers providing no room for Tesla to cut prices substantially more than they already have," Fiorani said.
However, he was optimistic about the future of EVs adding that people "are waiting for a better EV, not just a cheaper one."
Why It Matters: The announcement comes shortly after Musk confirmed that there would be no Model Y refresh this year. This decision was attributed to high interest rates dampening consumer demand for high-priced items, and the introduction of more affordable models by competitors in China.
At Tesla's annual shareholder meeting, Musk also teased three new vehicles. These new products, which are currently under wraps, could potentially include the affordable Model Y Musk has hinted at.
However, not all responses to Musk's vision have been positive. Per Lekander, CEO and portfolio manager at Clean Energy Transition criticized Tesla's models as outdated and overvalued in an interview.
Price Action: On Monday, Tesla was trading 0.25% lower at $177.57 during the pre-market after closing at $178.01 on Friday, according to Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari