Tesla’s new crossover SUV could be just the spark the company needs to get to the next level, according to one analyst.
In a note to investors on Friday, Wedbush analyst Dan Ives called the new Model Y a “potential game changer.” He noted that the SUV market offers significant growth opportunities for Tesla and the vehicle’s starting price of $39,000 for the base model makes it nicely affordable in the crowded SUV market.
“These price points were music to the ears of Tesla bulls,” Ives said.
Tesla CEO Elon Musk unveiled the long-awaited Model Y at a private event on Thursday night. The SUV comes in a variety of versions, depending on the customer’s choice of battery range and other features, like all-wheel drive. The SUV will come with seven seats, though a five-seat option will be available soon after. According to Tesla, the Model Y will ship with many of the bells and whistles you can find in its other vehicles, including its semi-autonomous driving system Autopilot and a panoramic glass roof.
Tesla (TSLA) plans to begin Model Y production in 2020 and could begin taking pre-orders this year.
But it’s the Model Y’s pricing that has Ives and many Tesla supporters excited. At $39,000, the base model fits Tesla squarely in the middle of the SUV market. And at the top-end, its $60,000 Performance version helps it remain competitive with most brands.
From top to bottom, Ives views the Model Y and its focus on the “hot SUV crossover market” as a “smart and strategic move by Musk & Co.” He added that he believes the Model Y could account for up to 20% of Tesla’s total sales within the next three years and could ultimately boost the company’s financial performance.
Ives is maintaining his Outperform rating on Tesla stock and assigned a $390 price target on the company’s stock. Tesla’s shares closed the day on Thursday at $288.96.