Tesla Shares Drop after Mediocre Model Y Reveal
Is Elon Musk stretching Tesla too thin with his Model Y? | Source: Frederic J. BROWN / AFP)
Tesla’s Model Y reveal, led to a mostly unimpressed audience and unenthused investors. Does the largely hype-less response show a market well-addressed or indicate declining interest? A definite sign in shareholder interest is the TSLA share price decline following the announcement.
Tesla expects to see a rise in demand for the Model Y of at least 50% over the model 3—or at least, Musk expects the spike in demand. But what makes him so sure it will come? One thing which may clue him in: Tesla’s E-SUV, the model X, accounted for nearly 20 percent of Tesla sales last year.
Despite the Model Y transitioning into a more cost-conscious audience which also wants an E-SUV, investors and analysts seem disappointed that there isn’t a new, disruptive feature added to the vehicle. This disappointment has been displayed in the form of back to back Tesla stock price drops in the last six weeks.
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What is the purpose of a Cheaper Model 3 and a low-cost Model Y?
Musk and Tesla are working to lay out infrastructure and product availability for autonomous Electric vehicle (EV) use, to reduce global dependence on fossil fuels. While much of the world’s electricity is still dependent on fossil fuels, there is a substantial efficiency increase in EV energy consumption compared to gasoline fuel consumption.
When the supply chain of getting the fuel extracted,