Deepwater Asset Management's co-founder Gene Munster thinks the affordable Tesla Inc. (NASDAQ:TSLA) Model Y trim level will cannibalize the existing Model Y.
Check out the current price of TSLA stock here.
What Happened: Following the company's earnings call on Wednesday, Munster took to the social media platform X to share his views on Musk's statement that the new affordable model would look the same as the current Model Y.
"I bet it uses the same body with scaled back features," Munster said in the post and drew comparisons with Apple Inc. (NASDAQ:AAPL), claiming that Tesla's plan was just like what the Cupertino-based tech giant "does with the iPhone."
Munster then expressed his concerns with the plan's possible effects on Tesla's existing lineup. "If it really looks just like the Y, it will cannibalize the Y. I have to think more about that trade off," he said.
Why It Matters: The news comes as Munster's opinion is shared by Future Fund LLC's managing director, Gary Black, who believes the new affordable trim level would add ';no incremental volume' to Tesla.
However, the earnings call has had a negative impact on Tesla, with the company's stock declining over 6% during pre-market trading due to several factors, including weak revenue, dwindling sales and more.
While CEO Elon Musk has claimed Tesla plans to put enough Robotaxis to serve over half of the population of the U.S., there could be problems ahead for Tesla with tariff impacts and the Trump administration ending IRA incentives.
Tesla offers Satisfactory Momentum and Quality, while scoring well on the Growth metric, but offering poor Value. For more such insights, sign up for Benzinga Edge Stock Rankings today!
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