While some investors fretted that a manufacturing ramp-up of the Model Y could pressure the company’s cash flow, others worried that the Elon Musk-led company has yet to address slowing demand for existing models.

Tesla said it would debut a long-range Model Y next year with a range of 300 miles, priced at $47,000, as well as a standard version, priced at $39,000, in 2021.

“It has the functionality of an SUV, but it will ride like a sports car,” Musk said at a splashy Thursday event in California. “This thing will be really tight on corners and we expect it will be the safest midsize SUV in the world by far.”

But Tesla, which revealed its long-awaited $35,000 version of its Model 3 sedan last month, is struggling to convince critics its business model works.

“We believe the event was more of a capital raising effort and branding exercise,” Cowen’s Jeffrey Osborne said. “We do not see the new Model Y igniting elevated demand or enthusiasm for the Tesla brand.”

None of the 30 analysts who cover Tesla cut their price targets or recommendations for the shares, but the tepid response to the launch underlines Wall Street’s ambivalence about the company after months of legal wrangling and social media outbursts by Musk.

Some analysts had raised concerns that demand for the Model 3 was slowing down in the US, especially after a reduction in the federal tax credit this year.

Two analysts, both known as Tesla bulls — Gene Munster from Loup Ventures and Ivan Fienseth from Tigress Financial Partners — said the company would likely need to raise money later this year.

“The biggest surprise was Model Y initial shipments will begin in the fall of 2020, a year later than we had anticipated. This timing likely implies the company is postponing the costly Model Y ramp in 2019 to conserve cash,” Munster said.

Tesla has been cutting jobs and closing stores in a bid to make profits, moving all of its sales online-only regardless of if customers make their way to a Tesla store.

The automaker also backtracked on its plan to cut the price of all of its vehicles, announcing on Monday that it would need to rein in some of the price cuts it doled out last month — including an $18,000 drop for the “Ludicrous” editions of the Model S and Model X.

Tesla shares finished the day down 5 percent at $275.43.

Source | New York Post & Reuters