Benzinga - by Piero Cingari, Benzinga Staff Writer.
Tesla Inc. (NASDAQ:TSLA) is set to announce a new lineup of vehicles in the coming weeks, and initial analyst estimates once again support Elon Musk‘s vision of targeting new consumer segments and expanding the growth potential of the EV maker.
At its annual shareholder meeting on June 13, Tesla revealed a slide showcasing current and future products, including three vehicles under covers that hinted at their body shapes.
According to Goldman Sachs analyst Mark Delaney, Tesla suggested that one of these could be a smaller version of the Model 3, another might be a van or a larger version of the Model Y, and the last could be a robotaxi.
“As new models and variants fully ramp we’d expect them to add at least 100,000 to Tesla’s annual volumes,” Delaney stated.
Lower Cost Models Set To Hit New Markets Tesla is set to introduce new vehicles utilizing elements from both its next-generation vehicle platform and existing platforms, integrating them into current manufacturing lines. The company announced that it could begin shipping these new models as early as late 2024 or 2025 with this updated approach.
The primary differentiation will be the price, which is expected to be lower than previous models. This strategy offers Tesla the opportunity to reach new consumer segments. Tesla had previously estimated it could reduce the cost of its next-generation platform by 50%.
According to analyst estimates, achieving about a quarter to a third of this target would result in approximately $5,000 to $7,500 of cost reduction per vehicle when scaled to higher volumes.
Goldman Sachs anticipates that a lower-cost, smaller version of the Model 3 will fall within the $25,000 to $35,000 starting price range. This model is expected to compete with the VW Golf and Ford Escape/Kuga, which sold around 200,000 to 400,000 vehicles annually in 2023.
If Tesla Conquers A Further 1% EV Market Share, It Could Add 300-400K Vehicle Sales
“On a trailing twelve months (TTM) basis, Tesla has over 50% share of the U.S. EV market, mid-teens share of the EV market in the select European countries, and high single digit EV share in China,” Delaney highlighted.
In 2023, Tesla shipped approximately 1.8 million vehicles, and the company estimates its current factories have a maximum potential capacity of close to 3 million vehicles per year. Goldman Sachs projects that Tesla will ship 1.785 million vehicles in 2024.
However, the outlook could significantly improve in 2025 if new vehicles and variants successfully penetrate new markets.
If Tesla were to gain an additional 1% market share in the U.S., Europe, and China with its new mainstream models, it would increase total volume by 300,000 to 400,000 units, according to Goldman Sachs estimates.
Despite these optimistic forecasts, Goldman Sachs maintained a “Neutral” rating on Tesla, with a 12-month price target of $175. Delaney believes Tesla is well-positioned for long-term growth given its strong standing in the EV and clean energy markets. However, he cautioned that weaker market conditions could potentially impact earnings in the near to intermediate term.
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