Robyn Denholm, the Chair of EV maker Tesla (TSLA), said this week that the company’s new Cybercab might launch with a steering wheel and pedals, which is a small design change that could make a big difference. Indeed, if this happens, the Cybercab could double as Tesla’s long-awaited affordable EV, often called the Model 2. Originally introduced as a two-seat robotaxi without traditional controls, the Cybercab was meant to cost around $25,000 to $30,000 and use Tesla’s cheaper “unboxed” manufacturing process.
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Unsurprisingly, CEO Elon Musk has been pushing for a fully autonomous future, while downplaying the need for a cheaper car. More specifically, Musk initially resisted the idea by calling it unexciting. However, he later warmed up to it when Tesla’s design chief showed him both the Cybercab and a version with a steering wheel. For now, Tesla has released cheaper Model Y and Model 3 variants, but at nearly $37,000 and up, they’re still seen as too expensive.
In fact, many analysts believe that a low-cost EV is essential in order to drive meaningful growth at Tesla. This is because bringing a cheaper Model 2 to market would help Tesla expand its lineup, maintain cash flow, and hedge against delays in its robotaxi rollout, which is still in early testing. In addition, the Model 2 could be built on the same platform as the Cybercab, thereby saving time and costs. Still, Musk has scrapped affordable EV projects before, so the decision may ultimately fall to Tesla’s board.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on Tesla stock based on 14 Buys, 11 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Tesla price target of $382.54 per share implies 15.8% downside risk.
