What's Better For Tesla: Price Cuts Or Low-End Models? Analyst Weighs In

Tesla, Inc. TSLA announced another round of price cuts in the U.S. last week and the move elicited mixed reactions from analysts and investors.

Future Fund's Gary Black on Tuesday took to Twitter to share his thoughts on the recent price cuts. The fund manager has been actively crusading for the launch of a $25,000 compact car and potentially a standard-range Model Y vehicle.

The launch of low-end models enhances affordability and expands the total addressable market to the masses, Black said. On the contrary, price cuts such as the $2,000 reduction to the long-range variant of Model Y are “merely a price cut,” he added.

Replying to a Twitter user who said the price cuts have made the Model Y Long Range version more affordable, Black said, "from $54,990 to $52,900 – which is back to where it was after the Jan. 12 price cuts."

See Also: Everything You Need To Know About Tesla Stock

Incidentally, Tesla CEO Elon Musk also highlighted the importance of affordability in a tweet last week.

"There is plenty of demand for our products, but if the price is more money than people have, that demand is irrelevant," he said.

In premarket trading on Tuesday, Tesla shares were up 0.86% at $186.10, according to Benzinga Pro data.

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