How The New Model S Will Impact Tesla's Sales And Stock? CLSA Analyst Explains

Tesla Motors Inc TSLA announced a newer version of its Model S on Wednesday called Tesla Model S 70D, where the "D" signifies dual motor. The newer version will be more expensive than the older version of the Model S and will start at $75,000.

Andrew Fung, CLSA Americas Research analyst, was on CNBC recently to discuss how the newer model will impact the sales of the company and the stock price.

Good For Long-Term

"The Tesla D is a nice upgrade and more compelling product than the prior 60 Kilowatt version of the Model S," Fung said. "You get a better range and then some of the feature and [outstander] which make the comparably equipped 6 […] than the new model and this scenarios is going to be good for the long-term volume."

Pressure On Stock To Remain

He continued, "That being said and consistent with our recent downgrade, the new 70D makes the upgrade to the 85D less compelling now and could cannibalize sales of the more expensive model in our view. This will obviously weaken the mix this year which [hits that on] our concerns on the margin pressure and downward earnings revision […] that could happen in the second-half of 2015."

"[Given] just the investor to [bait] around the ability to grow profitably and potential for another [capital raise] we believe that these concerns will continue to pressure the stock this year."

Less Chances Of Earnings Miss

According to Fung after Tesla released the better than expected sales number of Model S recently the probability of the company missing on its next quarter earnings "has dwindled a little bit", but he believes that in the upcoming quarters the earnings will decline sequentially.