Future Fund LLC‘s managing director, Gary Black, says that Tesla Inc.‘s (NASDAQ:TSLA) brand leverage is underdeveloped amid affordable Model Y speculation.
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‘Huge Supporter Of Brand Leverage,’ Says Gary Black
Taking to the social media platform X on Monday, the investor said that the new product launch from Tesla would most likely be a trimmed-down version of the Model Y crossover SUV, adding that he had been calling for a more affordable Tesla vehicle since 2020.
“I’m a huge supporter of brand leverage,” Black said, adding that ” lower-priced flanker products” broaden a premium brand’s appeal, but added that “there has to be a marketing benefit that allows TSLA to enter a new product category (e.g. hatchback) to drive incremental TAM beside price.”
He also cited Apple Inc.‘s (NASDAQ:AAPL) iPhone 16e as an example of affordable models driving a brand’s appeal. “IMO TSLA brand leverage is still way undeveloped,” the investor said.
Gary Black’s Tesla Model Y Criticism, Tesla’s Other Affordable Trims
This isn’t the first instance of the investor questioning Tesla’s strategy with the affordable trim. Black had previously stated that a new, affordable Model Y trim level wouldn’t offer the EV giant “incremental volume” and would cannibalize sales.
His concerns were also shared by Deepwater Asset Management‘s investor Gene Munster, who said that despite Tesla seemingly taking a page out of Apple’s book. “If it really looks just like the Y, it will cannibalize the Y. I have to think more about that trade off,” Munster had shared.
Tesla isn’t a stranger to offering specced-down versions of its models, with the company previously offering a trimmed-down Cybertruck with lesser features for $69,990. However, Tesla discontinued the model just 5 months after its launch.
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