Having created a huge demand without any new models lined up for near-term launch could create difficult business conditions for Tesla, said Bernstein research analyst Toni Sacconaghi.

The analyst, speaking in an interview with CNBC, stated that Tesla’s stock is “very difficult” to predict in the short term and that the upcoming numbers won’t look great. Tesla’s share price has been rallying since May, and is currently hovering around the $280 mark (as of July 3, 2023), while its market cap is $880 billion as of this date. Bernstein forecasts that the target stock price is $150.

Sacconaghi implied that Tesla would need to rethink its business strategies in the near term. "Margins will be down because they took incremental price cuts," he said.

He also questioned the brand's ability to drive sustained demand:

Tesla has continued to try and grow at very aggressive rates. 30 percent plus this year, 30 percent plus next year. And it has no new product offerings. How do you create incremental demand, when you don’t have anything new per se? That’s Tesla’s challenge over the next four to six quarters.

The Elon Musk-led brand announced several price cuts for all its models over the course of the year. The Tesla Model Y, the world’s best-selling car in Q1 2023 and Tesla’s major volume driver, now starts at $47,740 in the US – down from over $50,000 in April 2023.

He also said that Tesla will either fall short on deliveries at some point over the next four to six quarters or the brand might continue to cut prices to drive growth. Bernstein also forecasts an "underperform" rating for Tesla, and the near impact of wider adoption of the North American Charging Standard (NACS) will be “neutral to slightly negative.”

The analyst said that even though Tesla’s NACS is likely to become the default charging standard in the US, its user base won't expand significantly. 

Right now Tesla has 80 percent of the EV installed base in the US. Adding 20 percent of cars that can use that network, is not a big deal. Tesla’s supercharging revenue last year was $600 million, which is less than one percent.

Although note that the Bernstein analysis was out a few days before Tesla’s Q2 2023 sales figures were released. We’ve recently analyzed the quarterly sales, which appeared robust and broke many records.

The Austin-headquartered brand increased production by 86 percent over the same period last year, to 479,700 units, a new quarterly record. The previous record was set by Tesla as well, in Q1 2023, when it manufactured 422,875 vehicles.

It’s estimated that the brand might produce and deliver some 1.8 million EVs this year. Lion’s share of the sales is likely to be grabbed by the Model Y and Model 3.

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