Tesla Gets Good News on Model Three, Bad News From Hong Kong, 24
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Tesla Gets Good News on Model Trio, Bad News From Hong Kong
The very first Tesla Inc. (NASDAQ: TSLA) Model three flipped off the production line last Friday and into the arms of CEO Elon Musk. With a base price of $35,000, before possible incentives, the Model three takes direct aim at the mass market.
While that’s good news for the company, Tesla — and other electrical car makers — got some bad news from Hong Kong. The Wall Street Journal reported Monday morning that Tesla sales for the month of April in Hong Kong amounted to exactly zero. The government slashed a tax break for electrified vehicles, effective April 1, and the price of a Tesla Model S effectively enhanced from around $75,000 to $130,000. In March, Tesla sold Two,939 fresh cars in Hong Kong.
The fresh tax policy is effective through the end of March 2018, albeit the government has said it will review the policy before that date.
While the fate of electrified vehicles (EVs) emerges to be tied to consumer incentives, the latest report from Bloomberg Fresh Energy Finance (BNEF) projected massive long-term growth in EV sales regardless of government incentives:
Our Long Term EV Outlook is not a policy forecast. We assume that current policies remain in place until they are set to expire, but we do not assume any fresh policies are introduced. We also do not assume any specific national climate targets are met.
BNEF analysts have projected that vehicles with some degree of electrification will account for 54% of worldwide fresh car sales by two thousand forty and comprise a third of all light vehicles on the world’s roads. That projection is based on falling battery costs and stronger commitments from car makers to build electrified vehicles.
Battery costs have fallen by 73% since 2010, according to BNEF, and the price is expected to proceed falling as battery technology improves and as more battery factories are built.
None of this will happen instantaneously, however:
While EV sales to two thousand twenty five will remain relatively low, we expect an inflection point in adoption inbetween two thousand twenty five and 2030, as EVs become economical on an unsubsidized total cost of ownership basis across mass-market vehicle classes.
At $35,000 a copy, the Tesla Model three and the Chevrolet Bolt from General Motors Co. (NYSE: GM) are priced near the two thousand sixteen average fresh car price of $34,000. Lower operating costs are expected to more than offset the price of the cars, but without some near-term help in the form of government incentives it could be more difficult ratchet up enough request for EVs to encourage investment in fresh technology and higher production.
Tesla’s stock price dropped about 11% last week and traded down another 0.6% in Monday’s premarket session at $311.37. The stock’s 52-week range is $178.Nineteen to $386.99 and the 12-month price target is 283.89.
