Goldman Sachs Weighs In on Tesla Stock Amid New SUV Reveal

Business Insider

3 days ago

Tesla (NASDAQ:TSLA) stock has been trending sideways lately, as investors weigh the company's longer-term delivery prospects against near-term uncertainties. However, a newly unveiled model in China may provide a modest boost to sentiment – though it's not the affordable compact many were expecting.
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
After months of teasing a more affordable, compact vehicle, Tesla instead revealed a larger version of the Model Y, dubbed the Model YL. Shared via Weibo on Wednesday along with two images, the new variant is roughly seven inches longer and up to two inches taller than the standard Model Y, though still smaller than the Model X. According to China's Ministry of Industry and Information Technology, the Model YL is expected to launch in China this fall and will feature six seats.
Goldman Sachs analyst Mark Delaney, ranked among the top 3% of Wall Street stock experts, views the Model YL as an 'incremental positive' that could help Tesla strengthen its foothold in the SUV segment – not just in China, but eventually in the U.S. and Europe as well.
A central debate among investors has been how much the upcoming Tesla models in the back half of 2025 will drive meaningful growth. Delaney believes the YL is 'more differentiated' than many had expected, particularly given subdued expectations set during the Q1 earnings call. Rather than a cost-reduced, scaled-down Model Y, Tesla delivered something targeting the three-row SUV market – a surprising move that could open new demand channels. Delaney still expects a lower-cost Model Y or Model 3 variant to be introduced later this year, aligning with prior management hints.
Tesla hasn't revealed the planned price for the Model YL, but according to media reports, the average selling price is expected to be around 400,000 RMB (approximately $56,000). For context, the Model Y starts at about 264,000 RMB (roughly $37,000) in China and around $45,000 in the U.S. The Model X, by comparison, starts at approximately $90,000 in the U. S.
It's still unclear what features the Model YL will include at this price point – such as whether it will come with FSD, as Tesla initially offered with the refreshed Model Y in the U.S. – as well as its driving range or whether the price estimate is final.
For comparison, Li Auto's L8 starts at 322,000 RMB and has averaged monthly sales of five to six thousand units over the past year. The L9, priced similarly at 410,000 RMB, sees comparable sales. In the U.S., entry prices for the Toyota Highlander and Ford Explorer are both around $40,000.
Is Tesla stock worth buying right now?
According to Delaney, not quite. The Goldman Sachs analyst maintains a Neutral rating on TSLA with a $285 price target – about 11% below current levels. (To watch Delaney's track record, click here)
And he's not alone in his cautious stance. Of the 34 analysts who've weighed in over the past 3 months, the Street remains divided: 13 call it a Buy, 13 a Hold, and 8 say Sell. The average price target of $298.97 implies a 9% downside from current levels. (See TSLA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.