Tesla Headed to Hell in a Model Y


March 3, 2019


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With the Model Y expected to be priced around 10% higher than the Model 3 demand will focus on its attraction as an SUV and its passenger carrying capabilities. Johnson says:

Elon Musk has talked about production hell, delivery hell. I think what they’re in now is demand hell.

Highlight: “Would someone give up the Model 3 to go with the Model Y because it is a little bit bigger?” @zguz asks about Tesla’s Model Y and production issues. https://t.co/ObzMOMFjVy pic.twitter.com/BAyzhXqNnm

— Yahoo Finance (@YahooFinance) March 14, 2019

So, it’s very questionable as to whether the Model Y will take Tesla out of this demand hell.

According to Johnson, Business Insider and data from Inside EVs Tesla’s sales in the US fell from 25,250 cars in December 2018 to just 6,500 Model 3s in January 2019. Then fell further to just 5,750 in February, though the newly priced Model 3 at $35,000 was launched in the same month. Johnson says:

We think they’re going to lose close to $500 to $600 million this quarter due to weak demand and price cuts. We think the reason why you’re seeing all this erratic activity is because we think that they’re literally throwing things against a wall and hoping that they stick.

Model 3 Didn’t Boost Tesla Stock and Model Y Looks Unlikely to do Any Better

Tesla stock value peaked in June 2017, fluctuating back to similar levels until December 2018. Since then its been a volatile but mainly downward battle for shares of the car-maker. Over the past three months Tesla shares are down over 23%.

Tesla Share Price Over the Last Year Source: Yahoo Charts

Though the last month has seen upward gains for Tesla stock one would think the new launch would inspire investors more. Not so it seems. Tesla needs to see an uptick in demand but given Model 3 performance will this happen?

Johnson Expects Tesla Stock to Crash

The Vertical Group analyst expects Tesla’s share price to fall to $72, a drop of 75% from today’s price. David Tamberrino of Goldman Sachs says he too expects weak demand for Tesla this quarter and has a “sell” rating on the stock. Tamberrino believes the Model Y will just make demand issues worse for the Model 3. Tesla has also said it’s not likely to deliver profits for the first quarter of 2019.

The challenge for Tesla and Tesla stock is not just one of demand, but also of controversy. The Model Y will do nothing to help CEO Elon Musk with his SEC woes. Tesla needs to see some positivity. Or, further falls in demand, layoffs, and closures, could result in Johnson’s predicted crash.

About The Author

Melanie Kramer

A technology, blockchain, and cryptocurrency, writer and reporter based between France and Canada. Melanie has studied and retains an avid interest in global politics, business, and economics.

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