Tesla’s recent rollout of the Model Y Standard Range variant in China is bringing on critiques of positivity from some investment firms, including JP Morgan, who believes the introduction of the new crossover configuration will lead to upside for not only the automaker but its suppliers as well. Well there were times when they said Tesla stocks are overvalued and you shouldn’t add in your portfolio. So the question is what was the reason behind this 360 degree flip and how Tesla made such great moves that impressed these investment firms? Well in this video all these questions will be answered but first, welcome to Tesla future where we talk about the future of Tesla, Tesla stock and Elon musk’s projects. If You’re new here it will be greatly appreciated if you liked and subscribed to our channel. It’s free and you can always change your mind.
On July 8th, Tesla China officially launched the Made in China Model Y Standard Range Rear Wheel-Drive variant. With a competitive price of ¥276,000, Tesla can expect drastic amount of demands for the company’s most popular vehicle. Even before it was released, Elon musk predicted that the Model Y would be Tesla’s best-selling car, so much so that it would likely outsell the Model S, Model 3, and Model X combined. The Model Y has seemed to overtake the Model 3 in terms of popularity in some regions, especially because of its pricing, cargo space and performance specifications. The Model Y SR’s anticipated range ratings, which currently sits at 525 kilometers, that only adds additional hype for the highly-anticipated configuration of the crossover.
Tesla already offered the Long Range Dual Motor and Performance variants of the Model Y in China, which were both competitively priced and among the country’s most purchased vehicles. The Model Y officially overtook the model 3 in terms of sales in May 2021, eclipsing its sibling vehicle by over 3,500 units, according to Chinese passenger car association figures.
Because of the introduction of this new and demand-heavy variant, JP Morgan analysts Rebecca Wen, Nick Lai, Anqui Hu, and Jiajie Shen wrote a note to investors, indicating the vehicle could lead to “upside to battery and parts supply chain.” The introduction of the new variant already has JP Morgan expecting a drastic increase in production volume.
Well some analysts also predicted that with this competitive offering, Tesla Shanghai’s production volume will continue to ramp from the current 33 thousand units/month toward potentially 40 to 60 thousand units/month by Year-end.
As demand continues to increase, JP Morgan said in the note that Tesla’s suppliers are also sitting in a good position, as they will benefit from the new Model Y launch. “While we see a high chance of a technical pullback following the rally, we believe the supply chain may trade Tesla model 3 at higher levels by the end 2021 as underlying fundamentals continues to beat our estimates, including top-line volumes and margins .Tesla supply chain players that may meaningfully benefit from the new Model Y launch include Tuopu and CATL and materials suppliers such as Putailai ."
Jp Morgan also believes that china’s young customers are being sophisticated about Tesla’s strong brand halo might outshine foreign brands in similar price range. However, compared to Chinese brands, it will be totally down to customer’s choice between brand and content .
But it seems like 2022 will be the Year of the model Y, as the latest high volume electric vehicle from Tesla. But for now export are another potential market for model Y, and as this standard range model is being produced only in China at the moment.
As said in a statement by Tesla “China has the world-leading new-energy market and is the first market outside the U.S. that Tesla owns a locally produced product," .
Tesla, which counts China as its second most important market after U.S., and has a history of repeatedly lowering the price of its cars, particularly around the start of a new quarter, in order to boost sales.
But the new Tesla’s Model Y, is bigger, sportier car, that the Chief Executive Officer Elon Musk has said that it has the potential to outsell all other vehicles the company manufactures. But in June, China’s passenger car association forecasted increased interest in roomier cars, and looking forward to seven seater category.
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