Home Editor's Picks Tesla can be more selective with U.S. price cuts, say Goldman Sachs analysts

Tesla can be more selective with U.S. price cuts, say Goldman Sachs analysts


Tesla can be more selective with U.S. price cuts, say Goldman Sachs analysts By Investing.com

Breaking News


AuthorVahid KaraahmetovicStock Markets

Published Mar 05, 2024 07:02AM ET

© Reuters. Tesla (TSLA) can be more selective with U.S. price cuts, say Goldman Sachs analysts

Investors have closely monitored electric vehicle (EV) pricing, as recent price cuts by automakers have raised concerns over demand elasticity, profitability, and how these adjustments affect EV affordability and their market share relative to internal combustion engine (ICE) and hybrid vehicles, Goldman Sachs analysts said in a Monday note to clients.

The investment giant’s analysts think that Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN) “should generally be firm with pricing in the US,” citing their analysis of the elasticity of demand and profit “and the relative attractiveness of EV pricing for certain models especially with IRA credits.”

However, it might be logical to implement strategic price cuts on entry-level models, especially if paired with reduced features or bill of materials (BOM) cost, added Goldman analysts.

They also believe that battery electric vehicles (BEVs) continue to hold appeal for roughly a mid-teen percentage of the U.S. market, doubling current levels of market penetration.

The bank anticipates sustained long-term demand for EVs in the U.S., albeit with slower growth in the short to medium term, alongside robust expansion in hybrids and Plug-in Hybrid Electric Vehicles (PHEVs).

Meanwhile, Goldman remains neutral on U.S. election outcomes but thinks that changes to IRA credit eligibility or a repeal, necessitating both Congressional and Presidential agreement, could impact EV demand by 5-15% and 10-30% respectively. However, that effect is expected to diminish over time.

“Importantly, we believe that global regulatory policies and improved EV cost/choice over time would still be supportive of long-term EV growth,” the analysts wrote.

Tesla can be more selective with U.S. price cuts, say Goldman Sachs analysts

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News