TSLA’s new more affordable vehicles are not new models or form factors - they’re cheaper trims with trade-offs vs higher-priced trims, so by definition do not create new TAM.
According to my industry sources, TSLA’s new more affordable vehicles are unlikely to add incremental volume, as the give-ups by customers to save $5,000 (lower range, slower acceleration, exterior not as stylish, fewer interior aesthetics) will simply cannibalize higher-priced trims. Nearly every person I spoke with told me the below-$40K price would bring potential buyers in the door and then TSLA salespeople will try to up-sell them. This will not create new TAM. That’s what the market keeps telling us: Since the affordable vehicle unveil on 10/7 $Tesla(TSLA.US) -8%, NDX -3%. YTD $Tesla(TSLA.US) +2%, NDX +15%.
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