Tesla could be forced to cut prices further - Bernstein
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Teslaâs (NASDAQ:TSLA) decision to cut prices as of late is a sign that âvolume ambitions were unrealistically aggressiveâ and demand is flagging, according to Bernstein.
Equity analyst Toni Sacconaghi told clients that has now cut prices âthe company still appears to be struggling to generate sufficient demand and the impact from price cuts has been short-lived.â He projected run-rate demand at about 1.2M units in Q1, below the target of 1.8M voiced by the automaker. 
"At its core, we believe that Tesla's planned Model 3 and Y volume ambitions were unrealistically aggressive - somewhere around 3 to 4M units per year - or nearly ~50% global market share of their highly fragmented market segments,â Sacconaghi explained. âTeslaâs volume goal was for Model 3 + Y to be 3-4M units collectively, which would have represented nearly 50% of global market share in their categories - unrealistic in our view, given how highly fragmented the global auto market is and the fact that a significant share of the potential buyers remain skeptical of EVs and are not likely to switch from ICE in the nearterm.â
Therefore the company was forced to trim prices to stoke demand in pursuit of these lofty goals. As such, further price cuts are expected in China and Europe in the second quarter, in Sacconaghiâs view. 
His team maintained an Underperform rating on the stock and a $150 price target. 
âWe see risk-reward on Tesla 2023 as coming more into balance, but worry that the specter of further price cuts and downward revisions may make it difficult for the stock in the near to medium term,â Sacconaghi concluded.
Tesla (TSLA) shares edged 1.08% lower in premarket trading on Tuesday.
Read more on the automakerâs updated capital expenditure forecast.