Tesla just raised prices in U.S. and China – a reason to buy stock?

Tesla Inc (NASDAQ: TSLA) is in focus on Tuesday after the electric vehicles company increased prices of its vehicles in the United States and China.

Tesla shares down despite price hikes

Its Model 3 and Model Y now cost $250 more in the U.S. In China, the EV giant raised prices of those two models by 2,000 yuan.

Nonetheless, it’s important to note that Tesla Inc has executed some half a dozen price cuts in its key markets in recent months. Therefore, its cars are still cheaper (despite today’s hike) than at the start of the year.

Also on Tuesday, the Nasdaq-listed firm opted to raise the price of its vehicles in Japan and Canada as well. Tesla is known to frequently adjust prices based on market conditions.

Versus its year-to-date high, Tesla stock is down about 25% at writing.

Is Tesla stock worth buying here?

Despite the recent sell-off, JPMorgan analyst Ryan Brinkman warns that the pain is not over yet for Tesla shares.

He lowered his price target on Tesla stock recently to $115 that suggests another 30% downside from here. Brinkman’s bearish view is based primarily on concerns surrounding the company’s margins.

Last month, Tesla Inc said its automotive gross margin took a whopping 800 basis points of hit in its first financial quarter (read more) after lowering prices aimed at boosting volumes.

It’s conceivable that the price hike announced today will help a bit on the margins front, but it’s likely that Tesla will have to do more to alleviate the said concerns once and for all.

The post Tesla just raised prices in U.S. and China – a reason to buy stock? appeared first on Invezz.

You may also like