Tesla likely to increase Model S price for new reservations

In a November 23-dated research note, Maxim Group analyst Aaron Chew recorded that Tesla Motors has clearly suggested that it is planning to increase the price of the popular Model S electric car for the new reservations of the vehicle.

Chew said in the research note that the rise in the Model S price for new reservations was hinted by Tesla in a recent TSLA commentary, though the company is still to make an official announcement of the hike.

The imminent increase in the price of Model S - which was recently awarded with the `Car of the Year' title by Motor Trend - will, however, not affect the Model S buyers with reservations, provided that they configure as well as finalize their cars "within a fair, predefined timeframe" before the vehicle's more expensive price-tag comes into effect.

With Tesla having suggested that the Model S price and package change will be announced "in the near future," potential buyers who are planning to purchase the Models S can reserve their vehicles before the change takes place, and buy the vehicle at its existing cost.

Meanwhile, noting that the suggested Models S price rise may raise concerns about "the impact on demand and implications for the current run rate of order confirmations and profitability," Chew said that Maxim Group is of the opinion that the price increase reflects Tesla's "broader strategy of adjusting to a higher-end, less price-elastic customer base and market segmentation ahead of its lower-end $30,000 Gen 3 model."