Tesla (NASDAQ:TSLA) saw a nearly 7% increase in its stock price on Monday following the announcement of price hikes for its Model Y electric vehicles in certain European countries and the United States.
The company revealed that prices for the Model Y would be raised by about 2,000 euros ($2,177) in select European countries starting March 22, as stated in a company release on Saturday. Additionally, Tesla announced a $1,000 price increase for all Model Y cars in the U.S. effective April 1.
Tesla’s stock surged to $174.72, marking a nearly 7% increase, after these announcements, representing its largest daily percentage gain in over a month following a two-week decline. This increase comes after the stock hit a nearly 10-month low last week, positioning it for a second consecutive day of gains, now trading at $173.92, up 6.3%.
Analysts from Deutsche Bank, led by Emmanuel Rosner, noted in an investor note on Monday, “In light of persistently high Model Y inventory, we view Tesla’s preview of future price increases as an attempt to boost sales this month, rather than a sign of solid demand.”
According to LSEG data, the median estimate among the 49 analysts currently covering Tesla’s shares is $193, down from $211.50 a month ago, with an average recommendation of “hold.”
Goldman Sachs analysts lowered their 12-month price target on Tesla’s stock to $190 from $220, citing challenges in ramping up Model 3 production and manufacturing downtime at its Berlin gigafactory due to an arson attack.
Tesla’s sales are expected to be impacted by reduced electric vehicle subsidies in Europe, increased competition in China – its second-largest market after the U.S. – and slowing demand, according to analyst Mark Delaney in an investor note on Sunday.
“While we continue to believe that Tesla is well positioned for longer-term growth given its strong position in the EV and clean energy markets … we believe that softer near-term EV market conditions are weighing on earnings,” Delaney said.
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Author Stephanie Bédard-Châteauneuf 
