Analysts at Bernstein said on Monday that the $25,000 electric vehicle exists, and Tesla (NASDAQ:) rival BYD makes it.
A report from Reuters last week claimed that Tesla had scrapped its low-cost car plans. However, shortly after, Elon Musk denied the claims, suggesting the article was a lie.
In its note, Bernstein explained that the medium-term bull case for Tesla is that the company is in a lull, awaiting the launch of its lower-cost platform that will dramatically reinvigorate growth.
In a further tweet on Friday after the close, Musk said the company will unveil its robotaxi in August.
“We see a Robotaxi unveiling on August 8 as more aspirational, akin to Tesla’s Semi and Roadster announcements – and not likely to be Tesla’s next model,” wrote Bernstein.
Despite the Reuters report, the Model 2 is expected to start at $25,000 and debut in late 2025/26.
Bernstein added: “A lower priced platform will invariably increase Tesla’s available market – our analysis suggests that a $25K sedan and $30K SUV would increase Tesla’s addressable market by 100%+.”
However, the firm notes that Chinese electric vehicle firm BYD offers its Seal model in China today for less than $25,000, which compares very favorably to a Model 3, and a $25,000 SUV today that compares favorably to a Model Y.
Bernstein expects competitors’ offerings to get better over the next three years.
“The other challenge Tesla will likely face with the Model 2 is cannibalization of its existing (and increasingly aged) lineup,” said the firm. “The upshot is that the Model 2 will invariably be a huge boost to Tesla – but perhaps not as big as investors believe.”
