Tesla Prices Will Come Down In A Rare Event, Says Munster — Here's His Theory

Tesla Inc (NASDAQ: TSLA) is likely to bring down prices of its electric vehicles in two years, Loup Ventures analyst and founder Gene Munster said on Wednesday.

What Happened: Earlier this week, the Elon Musk-led EV maker raised the prices of some of its cars in the U.S. and China, the second such hike in a week amid inflationary pressure on raw material and logistics.

Munster, who is bullish on Tesla, said that prices rarely come down after hikes, but he believes the company would still want to “try to push pricing down.” 

“We have seen them do both price increases and price decreases. They've kind of played both sides of it,” Munster said in a discussion with fellow Loup Managing Partner Doug Clinton.

“If they (Tesla) start to ramp production with Giga Berlin and in Austin, there's an opportunity for them to lower their prices. The best guess is that prices will probably go up in the next two years and then, probably come back down.”

See Also: Tesla Hikes Prices In Both US, China For The Second Time Within A Week: All You Need To Know

Why It Matters: Tesla sold nearly a million electric vehicles last year and is set to add more capacity with two key facilities this year — Giga Berlin and Giga Texas.

Earlier this month, Tesla secured approval to begin commercial production at Giga Berlin, which is key to Tesla’s expansion plans in Europe, where Musk aims to take on regional giant Volkswagen Group (OTC: VWAGY). 

The Berlin plant could eventually clock a 500,000 annual EV capacity and lower reliance on the Giga Shanghai plant in China.

Price Action: Tesla stock closed 4.8% higher at $840.23 a share on Wednesday.

Photo courtesy: Tesla Inc