Tesla’s Next Major Growth Phase May Be Years Away
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Tesla Inc. is likely years away from fully ramping a new lower-cost model, which will take the company longer than Wall Street is assuming, Evercore analysts said after touring the carmaker’s Texas factory.
“Tesla increasingly is a ‘2027 story,’ ” Evercore analysts led by Chris McNally wrote in a report March 11. He questioned whether the best-case scenario for a cheaper vehicle colloquially referred to as Model 2 is more like 500,000 units in 2026 rather than a consensus of 1 million-plus.
CEO Elon Musk has said Tesla is “between two major growth waves,” with the first underpinned by the Model 3 sedan and Model Y crossover and the second expected from a cheaper next-generation electric vehicle. The company expects to start production of this EV toward the end of 2025 at its plant in Austin.
The next-gen model’s bill of materials will decline from $28,000 to $20,000 and likely have around 250 miles of range and no glass roof, McNally wrote. A “big debate” will be whether Tesla’s driver-assistance hardware will be standard, he said, citing his team’s belief that the hardware could cost $2,000 to $3,000.
Evercore now expects Tesla to deliver around 2.7 million vehicles in 2026, meaning its estimate for earnings per share that year is now 18% to 20% below consensus.
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