Wall Street reacted nervously on Friday to Tesla Inc
(Reuters) — Wall Street reacted nervously on Friday to Tesla Inc’s move to shut its network of high-end showrooms and launch a long-awaited cheaper version of its Model 3 sedan, as shares fell 8 percent and most analysts expressed concern over the company’s long-term margins.
The arrival of the $35,000 Model 3 had been largely anticipated — although it came months earlier than expected — but news that Tesla planned to dismantle its network of stores, a hallmark of its upscale sales strategy, caught many off-guard.
In Thursday’s announcement, Elon Musk-led Tesla said prices on all of its cars would be lowered by up to 6 percent. It was the third cut this year for the Model 3 after a $2,000 price-cut in January and a $1,100 reduction last month.
“Taken in conjunction with the introduction of the $35k Model 3, we view this (price cuts) as confirmation that demand for Tesla vehicles has softened,” RBC Capital Markets analyst Joseph Spak wrote in a client note.
