Tesla Inc.'s newly revealed Model Y has failed to excite Wall Street, with some investors saying that the unveiling of the crossover vehicle played out as an infomercial trying to mask weaker model 3 demand and a cash grip.
shares fell almost 4% on Friday and are down more than 5% from the moment CEO Elon Musk announced the vehicle's unveiling date on Twitter. Crossover starts at $ 47,000 and ordering requires a $ 2,500 deposit, which is more than Tesla demanded at the time of Model 3 revealed.
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At the disclosure late Thursday, Musk said he expected to sell more Model Ys than Tesla's other vehicles in combination. The production of the car is expected to begin at the end of 2020, and a standard bill, cheaper car, is expected to roll out the factory floor in early 2021
"We're still worried about the manufacturing timeline," said Toni Sacconaghi with Bernstein. Since the 2020 target, the model is similar to the 3's, and ultimately it was delayed by 9 to 12 months, he said.
Read more: Tesla's credit rating is still "strained," says Moody's.
The more expensive deposit can also put strong emotions on Tesla's cash situation, Sacconaghi said. Ordering a model 3 at the time of launch required a $ 1,000 deposit.
Model Y orders could be "suppressed", says Joseph Spak at RBC Capital Markets. "The vehicle is not available for almost two years, and consumers can realize that putting money down early for Model 3 does not offer many benefits," he said.
The bigger question is how much model Y will cannibalize model 3, which can be significant because crossover SUVs are more popular than sedans, Spak says.
Unlike previous disclosures, there was "no" one thing "that many expected," he said. Spak also questioned Tesla's strategy to show the vehicle now against revealing the closer production start.
Analysts at Roth Capital Partners, led by Craig Irwin, had their own answer to that question: "The launch of Model Y was likely to go ahead to divert from weak demand for Model 3," they said.
Related: Here's why Tesla's model Y message is "feed to the bears"
"Tesla must now deliver the unit growth for the log to work, in our opinion," said the Roth analyst.
The night "kept no surprises" and played as an infomercial for Tesla without the only moment, Jeffrey Osborne said at Cowen. There was nothing to claim anxiety about demand disruption, no model S and model X update, and no color round results for the first quarter.
"We believe that the event was more of a capital increase and branding exercise. We do not see the new model Y igniting increased demand or enthusiasm for the Tesla brand," they say.
Tesla shares have fallen 15% over the last 12 months, while S & P 500
SPX, + 0.56%
has risen 2.9% and the Dow Jones Industrial Average
DJIA, + 0.56%
has won 4.1%.