ANALYSIS-Wall Street Wants Answers From Mars Resonance On Tesla's Affordable Cars

Reported by Hyunjoo Jin, Norihiko Shirouzu and Chris Kirkham

(Reuters) - Elon Musk's vague social posts following an April 5 Reuters exclusive report that Tesla had canceled plans for its $25,000 "Model 2" electric car have kept investors hanging back .

"Reuters is lying," Mass resonance wrote in a posting for the occasion.

Nearly two weeks have passed without a concrete update from Konica, and Tesla's investors are on the edge of their seats. With global demand for electric vehicles dropping and competition from China for cheaper electric vehicles intensifying, some investors are demanding clarity from resonance analysts on the Model 2's status and plans to stem the sales decline.

Tesla's announcement Monday that it is laying off more than 10% employees and a handful of executives around the world has added to shareholder unrest.

After the layoffs were announced, analysts at Wedbush Securities wrote, "The market wants and needs answers on Tesla's earnings call scheduled for April 23." They cited a months-long "horror show" of news about Tesla's negative noodles, calling for a clear "strategic vision ...... of which Model 2 is a key component".

Wedbush senior equity analyst Dan Ives told Reuters that Maas resonance's silence on the Model 2 is "galling" to Tesla investors "because it's critical to Tesla's growth story."

Ross Gerber, an investor in Tesla and president and chief executive officer of Gerber Kawasaki Wealth & Investment Management, put it more bluntly." He said, "It doesn't make sense to invest in Tesla if Tesla doesn't come out with this car.

Mareson and Tesla did not respond to our requests for comment or to the April 5 report.

The WSJ would also like clarification on another key aspect of the April 5 report: after abandoning its economy car program, Tesla plans to launch self-driving robotic rentals on the same small-car platform.

Another article resonantly published by Masch raised many questions and answers: "Tesla's robotic taxi will be unveiled on August 8," he wrote, implying that some version of the self-driving car could be ready in August, without providing details. Industry experts say it's unlikely that Tesla will be able to produce road-ready robotic taxis quickly, given the enormous challenges of engineering and monitoring the noodles.

On Tuesday night, Mareson re-posted Tesla's focus on self-driving cars on his social media site X: Mareson said, "I'm not exactly betting on the company, but it's an obvious move to move forward on self-driving. Everything else is like a variation on the wagon train".

Since the April 5 Reuters report, some investors have cheered the idea of focusing on robotic axes rather than the Model 2. The initial two articles from Mas resonance helped reverse the decline in Tesla shares, which fell 6% after the Reuters report on the economy model.

However, Ma resonance speech still let investors speculate on Tesla's next plan to produce what models, the key is the timetable. Tesla shares fell again after news of the layoffs broke on Monday, and are now down more than 45% since reaching a recent peak in July.

Tesla remains the world's most valuable automaker, with a market capitalization of about $500 billion, higher than Toyota, the world's top-selling automaker.

An April 5 report on the Model 2 cited four sources with knowledge of Tesla's strategy and company information describing the project's termination. The company information, which was accessed by Reuters, showed that a person described by the sources as a Model 2 project manager told employees not to notify suppliers of the "project's cancellation".

The manager wrote, "You all did an incredible job, and the lessons learned will carry over to all future projects you work on." He recommended that the staff "properly process and document the issues" and process "the remaining items so that we can close them before we move forward."

Investors "awaiting clarification

In the absence of an answer from Maas resonance, analysts have issued a number of advisory opinions on Tesla's future, both with and without the Model 2.

We await clarification from Tesla: "We await clarification from Tesla," an analyst report from Deutsche Bank also noted. Deutsche Bank called the cancelation of the Model 2 a "complete change of the subject," saying it would cause investors betting on Tesla's mass-market growth to abandon their investments, allowing "longer time-span AI/tech investors" to make way for the development of robotic rental cars .

Wedbush sees a bleak future for Tesla without the Model 2. Writing last week, Wedbush analysts said that canceling the Model 2 would be a "disaster" for Tesla's prospects, and that robotic rentals aren't a "magical model" to replace the Model 2. "The future of Tesla is bleak.

Mas reson had said in January that Tesla would deliver the Model 2 in the second half of 2025, confirming those plans as exclusively reported by Reuters." If the company makes a 180-degree turn in three months, it's simply the Twilight Zone," said Weatherbush's Ives. Ives said Tesla has been slow to start work on its long-promised affordable models.

"It was largely self-inflicted - there were no adults in the room," he said.

Currently, Tesla's cheapest model is the Model 3 sedan, which sells for about US$39,000 in the US. Tesla has lowered the prices of its Model 3 and Model Y crossovers as global demand for electric vehicles has weakened and Chinese electric car makers have taken over the entry-level market.

Tesla's only current best-selling models, the 3 and Y, are aging and in need of a redesign. Tesla has been struggling to mass-produce the more expensive pilot Cybertruck, in part because of manufacturing issues with its innovative 4680 battery. Tesla told investors earlier this month that sales of all its cars fell 8.5% in the first quarter, the first decline in nearly four years.

In China, Chinese electric car makers such as BYD are already doing a roaring trade in electric vehicles that sell for as little as $10,000 a pop. Chinese smartphone and home appliance maker Xiaomi stunned the industry this month with the launch of its first car, a sporty sedan priced at about $30,000 that received more than 100,000 orders in less than a week.

Sensible" and "Courageous" Says

Some investors have welcomed the idea of scrapping the Model 2 in order to focus on the robotics axis. One such advocate is Gene Munster, a carpet maker at Deepwater Asset Management who owns Tesla stock. Munster said he didn't believe that Mas resonance really denied the April 5 Reuters report, as many investors had speculated.

"He didn't say anything about the Model 2," Munster said." He just said Reuters was a liar. But he said everyone is a liar."

This inscrutable attitude, coupled with the subsequent posting of "Robotic Rental Car Unveiling" by Mareson, convinced Munster that Tesla was in fact shelving the Model 2 and focusing on robotic rental cars - a strategy he applauded. Munster called Tesla's move "smart" and "bold" because it could take Tesla into the next generation of transportation. He said self-driving cars would be "a business with profit margins that are orders of magnitude higher".

Tesla investor Jake Bleicher, a resonance manager in the investment group at Carson Wealth Management Group, agrees that Tesla has the potential to leapfrog China's electric-car competitors with a true self-driving car. However, he said that given the promises implied by Mas reson in his "8/8" post, he should make some concrete announcements in August.

Mas resonance has sworn for years that self-driving Tesla cars are just around the corner.

"If on August 8, Tesla says, 'We're going to roll out robotic rentals in five or six cities,' I think that's enough to get the stock to grow," Bletcher said.

He said investors "will be scared" if progress is not that visible.

"Especially with the profit margins on (Tesla) cars plummeting over the last two years," Bletcher said, "the cars have become less about the cars and more about the promises that resonate with Mas".

(Reporting by Hyunjoo Jin (San Francisco), Norihiko Shirouzu (Austin, Texas) and Chris Kirkham (Los Angeles). (Writing by Brian Thevenot. Editing by Michael Williams)