Tesla has introduced new Standard trims for its Model Y SUV and Model 3 sedan, both priced under $40,000, amid a recent stock dip and expired EV tax credits. The move aims to expand its customer base as the company faces shrinking sales and competition. Investor opinions on the stock remain mixed.
Tesla's stock fell more than 5% on Friday, caught in a trade-related market downturn, and has declined about 4% over the past week. Despite this, shares have risen over 60% in the past six months and nearly 90% over the past year, reflecting ongoing investor confidence in the company's long-term vision.
The launch of the new models comes after Tesla reported record-breaking 497,099 vehicle deliveries in Q3 2025, surpassing the 447,450 vehicles manufactured in the same period. However, critics argue this bump was artificial due to the recent expiration of the $7,500 federal EV tax credit, exacerbating challenges from shrinking sales and heated competition, particularly from China.
Top investor Daniel Sparks, a 5-star analyst in the top 1% on TipRanks, views the affordable trims positively. "One thing is clear," he said. "They’ll almost certainly help boost volume in 2026 — and their included self-driving hardware means they will help grow the company’s Robotaxi-ready fleet." Sparks added, "Lower entry points can accelerate fleet growth and shipping autonomy-capable hardware across that fleet bolsters the software monetization opportunity."
The current Robotaxi program in Austin underscores that this network is progressing beyond concept. Yet Sparks cautions that the Robotaxi initiative is still nascent, and Tesla's high valuation—trading at a 14.8x price-to-sales ratio compared to a peer average of 1.2x—leaves little margin for error.
Wall Street's consensus is a Hold rating, with 15 Buys, 13 Holds, and 9 Sells. The average 12-month price target stands at $363.72, implying about 12% downside from recent levels around $413.49. In contrast, one valuation model estimates Tesla's fair value at $425, suggesting it is 2.8% undervalued and highlighting potential in its shift toward AI and software revenue. Key risks include delays in full self-driving approval.