Tesla, Inc. TSLA recently announced that it is temporarily dropping the price of basic Autopilot upgrade option, which includes driving assist features such as steering, accelerating and braking within a lane, to $2,000 until Jul 1. The offer is targeted to the buyers of the Long Range (LR) rear-wheel drive Model 3. While basic Autopilot is included as standard for all Tesla vehicles, it was not included in the LR RWD Model 3 variant, which has now been discontinued.
Elon Musk, CEO of Tesla, informed that the upgrade to basic Autopilot for these customers would drop to $2,000, when they order through the app. He also took the opportunity to remind Tesla customers that as of Jul 1, the price of Full Self-Driving (FSD) package will increase by $1,000, raising the price to $8,000 in the United States. Through announcing the FSD price hike and the end of the basic Autopilot offer, Tesla is seeking to convince customers to upgrade by the end of second quarter as well as boost revenues.
The EV maker started selling the FSD package for $5,000, gradually raising the price to $7,000 now. Previously, Elon Musk stated that as time goes on, the cost of FSD features that currently include Autopilot navigation, automatic lane change, auto parking, traffic light control, will rise as the firm adds more features to what will eventually become a fully autonomous driving suite.
Meanwhile, Tesla, which currently manufactures fully-electric Model Y with five seats, is expected to launch a seven-seater version later this year. First delivery is likely to be rolled out by the company around October or November. However, it’s uncertain what the 7-seater production version of the Model Y would be like, but Tesla has is planning to bring back rear-facing seats option recently.
Tesla appears to be facing major production issues with the current Model Y that consumers in the United States are reluctant to purchase the battery-electric SUV and in some cases, refusing deliveries as well. The defects reportedly cover a variety of areas, including paint and trim issues, seat indentations and a loose seat belt. While Elon Musk has directed the firm to redouble its efforts to identify and repair faults as cars come off its Fremont’s assembly line, some are still being shipped with major defects.
The company expects second-quarter 2020 production of 83,177 vehicles, including Models S, 3, X and Y. The figure suggests a decline from 102,000 vehicles produced in the first quarter. The more Model Y’s get returned, rejected, or recalled, the worse this quarter could go for Tesla.
Zacks Rank & Other Stocks to Consider
Tesla currently carries a Zacks Rank #2 (Buy).
Shares of the company have appreciated 137.7%, year to date compared with the industry’s rise of 38.9%.
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Some other top-ranked stocks are Niu Technologies NIU, AgroFresh Solutions, Inc. AGFS and AngloGold Ashanti Limited AU, each carrying a Zack Rank of 2 at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Shares of Niu have rallied 80.7% year to date against the industry’s decline of 13.4%.
Shares of AgroFresh have gained 34.1% year to date compared with the industry’s rise of 27.4%.
Shares of AngloGold have returned 23.6% year to date compared with the industry’s rise of 17.5%.
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