Fund Managers Left Puzzled By Tesla's Price Hike Warning: 'Hard To Read Between The Lines' Or 'Kind Of An Old Trick'

Tesla, Inc. TSLA recent warnings about the Model Y price hike that would come into play beginning in the second quarter elicited mixed reactions from analysts.

Present Tense, Future Perfect? Deepwater Asset Management’s Gene Munster said in a post on Wednesday that he received a mailer from Tesla regarding the modest discounts on the Model S, X and Y vehicles in a quarter-end push and the $1,000 hike for Model Y, effective April 1.

This has apparently left the tech venture capitalist confounded. “Over the past year there have been so many price adjustments it's hard to read between the lines what a $1k end-of-month discount followed by a $1k price increase means for demand and margins,” he said.

Munster, however, does not see the near-term dynamics altering the big picture. While painting a gloomy picture for Tesla in the near term, he expressed confidence in the outyears. “The big picture remains unchanged: With interest rates remaining high, demand and margins will be muted in 2024. Good news should come in 2025 and 2026 with lower rates and the new cheaper model,” he said.

“Kind of an old trick to say prices go up at the end of the quarter to goose sales for 2 weeks. I'm not convinced this is some new trend,” he said.

Why It’s Important: Tesla is due to release its first-quarter deliveries in early April. With China sales not taking off and production ramp-up of the refreshed Model 3 and Cybertruck production remaining slow, analysts have tempered their expectations.

Data released from China on Tuesday showed a week-over-week decline in insurance registration data for Tesla vehicles.

Tesla number cruncher TroyTeslike said on Sunday he estimates deliveries of 435,000 units for the quarter compared to the 475,000-unit consensus estimate. The company usually releases a self-compiled consensus estimate a week ahead of the delivery update. In a separate post on Tuesday, TroyTeslike flagged that the magic number is 422,875 units (Q1’23 sales) if Tesla has to avoid a year-over-year volume decline.

At the time of writing, Tesla shares were trading 0.42% up at $172.04 on Wednesday, according to Benzinga Pro data.

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