While Tesla Inc.'s (TSLA) first mass-market vehicle, the Model 3 sedan, blew away a team of engineers hired by UBS, the $35,000 base model the company originally planned to make is expected to lose money, according to the UBS experts. (See also: Tesla: Musk Makes ‘Valuable Apology’ on Conf. Call.)
While Tesla is making an operating profit of more than $3,000 on each sale of the current low-price version of its Model 3 sedan, it would likely lose nearly twice that amount if it sold the vehicle at its previously promised $35,000 price tag, according to UBS Securities LLC. The Model 3 has been viewed as an integral stepping stone for Tesla as it pushes out of its niche luxury market to compete against a growing number of competitors offering electric vehicles with autonomous driving capabilities. The 澳洲幸运5官方开奖结果体彩网:Silicon Valley automaker, which has yet to turn a profit, began se🐟lling the⭕ Model 3 one year ago.
According to the analysts' cost analysis, the $42,000 expected average sale price of the base Model 3 after a few options would generate just $620 of profit for the auto company, with a 澳洲幸运5官方开奖结果体彩网:breakeven point at roughly $41,000.
Technically Advanced, ꦓFinancially Disadvantaged
Nevertheless, the $49,000 Model 3 version examined by the UBS engineers was touted as a "next-gen, military-grade tech that's years ahead of peers." Analysts indicated that some of the Model 3's technology, such as its electric powertrain, stood out as an example of its superiority over models from rivals like General Motors Inc. (GM) and BMW.
Tesla shares are trading down 8% on Friday, set for their worst day in nearly five months, after Musk told The New York Times that his tweet last week on taking Tesla private was not reviewed by anybody. The publication also reported that the Palo Alto, California-based company is looking for a second executive to take some pressure off Musk. Trading at $308.62, TSLA stock reflects a 0.9% decline 澳洲幸运5官方开奖结果体彩网:year-to-date (YTD) compared to the 澳洲幸运5官方开奖结果体彩网:S&P 500's 6.3% return over the same period.
UBS reiterated its sell rating on Tesla stock with a 澳洲幸运5官方开奖结果体彩网:price target of $195 per share, reflecting a 37% downside from Friday afternoon. (See also: Musk Promises 'Short Burn of the Century'.)