Tesla’s SUV launch overshadowed by demand concerns, cash deficit


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Tesla’s SUV launch overshadowed by demand concerns, cash deficit

On Friday, the 15th of March 2019, the shares of electric vehicle maker, Tesla Inc. had faltered as much as 5 percent, as investors seemed to be wondering on the woods, triggering questions whether the EV maker’s electric sports utility vehicle could grapple with a whamming pressure of cash flow.

Besides, analysts kept pondering why Tesla had not been addressing to a burning concern related to sluggish demand of their other models. Investors and analysts had raised those questions, as on Thursday, March 14th Tesla Inc.

had launched their Model Y Compact SUV, based on the same platform as Model 3, without clarifying how their business model would work, while a cheaper version of Model 3 Sedan, worth of $35,000, had already started to drain money, since most of their competitor’s electric vehicle price had been starting from as low as roughly $60,000 Addressing the introduction as diversion tactics of Tesla Inc.

an analyst, Frank Schwope said, “It seems to be another distraction tactic presenting a new model and (to) divert from the problems with the other cars, the production, and the profitability”. Besides, some Wall St.

analysts had also raised concerns over the demand of high-priced Model 3, as it had been slowing down, especially after being exempted from tax incentives offered by Trump Administration for EV manufacturers by June last year, as a ratings firm Moody wrote in a research note, “We believe that Tesla’s original business model for the production and profitability of the ‘affordable’ $35,000 version of the Model 3 is proving to be very difficult to achieve”.