Tesla Motors upgraded its base version of the Model S to theAWD 70D sedan, a move that suggests demand for the automaker’s vehicles are at comfortable levels, according to Global Equities Research analyst Trip Chowdhry. The analyst believes the upgraded version will fulfill rising demand and make Tesla’s cars remain desirable.
A right move from Tesla
Chowdhry noted that the new 70D base version will come with a price tag of $75,000, marginally above the $71,000 price of the earlier Model S version. The higher price will support the average selling price of Tesla vehicles, suggesting that the automaker will have higher margins.
The updated version will have increased battery strength by 15% and better electric drive range of 240 mph, according to a report from The Wall Street Journal. Chowdhry noted that the upgrade in the battery capacity suggests the automaker is drawing benefits from economies of scale, both in drive train and battery.
Also according to the analyst, the southern belt of the United States posts higher demand for Tesla vehicles, and the AWD base model will be seen in good light by customers living in Canada, Europe and the northern part of America.
The research report stated that for the first three months, around 10% of the vehicle sales were 60 kWh version of the Model S, while 30% were for the most expensive P85D and 60% were for the S85 and S85D. The data shows that the decision made by Tesla is a right one.
More catalysts moving forward for Tesla
Tesla Motors is also preparing to launch its crossover Model X, and already 20,000 units has been registered, according to Tesla. The Model X is expected to come by the third quarter of this year. Also Tesla is not limiting itself only to cars. Recently, CEO Elon Musk said the company will launch a new product line toward the end of this month, which is not a car.
Such developments reflect the company’s commitment to achieving its annual delivery target of selling 55,000 units. The Palo Alto-based company reported first quarter sales of 10,030 Model S sedans. Additionally, Tesla announced that it will keep posting its quarterly sales number within three days of the end of each quarter. The move was praised by auto analysts.
Global Equities assigned an Equal Weight rating to the stock, setting a price target of $385.