Tesla shares fall 5 percent after company unveils Model Y

Frederic J. Brown | AFP | Getty Images

Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019.

Tesla shares opened down 5 percent Friday morning, hours after the company unveiled the Model Y crossover utility vehicle that some Wall Street analysts are calling ‘underwhelming.’

“We thought the unveiling was a disappointment and are seeing a classic ‘sell the news’ situation this morning,” CFRA analyst Garrett Nelson told CNBC.

CEO Elon Musk dove into one of the hottest segments in the automotive market with the long-awaited debut of the Model Y at its design studio in Los Angeles on Thursday night.

“It’s wild to think about, 11 years ago today we’d made literally one car. And a year from now we’ll have made a million,” Musk said.

The Model Y will cost $39,000 to $60,000 depending on the extras and is about 10 percent bigger than Tesla’s Model 3 mid-size sedan. It features seven seats, a panoramic glass roof and 66 cubic feet of cargo space, Musk said, showing off a Model Y prototype at the Tesla Design Center on Thursday night.

Nelson said the car design was “more or less” expected.

“The problem was the timing of first deliveries,” Nelson said. “At the Tesla shareholder meeting last June, Musk said that first Model Y deliveries were likely in the first half of 2020, now he’s saying fall 2020 for higher-priced versions and spring 2021 for the $39,000 version.”

Competition is really heating up against Tesla with company’s from Ford to Ferrari planning to introduce their own all-electric lineups in the coming years.

“Tesla is going to face significantly increased EV competition starting with the 2021 model year vehicle, which will be available starting in the spring of 2020,” he said.

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