Goldman Sachs analysts predict EV pricing and demand trends


According to Goldman Sachs analysts, automakers’ recent price reductions in electric vehicles (EV) have drawn significant investor attention amidst concerns about demand elasticity and profitability. Scholars in finance predict that companies like Tesla and Rivian might need to adjust their strategies, possibly through price cuts on selected models, to address these concerns while maintaining their market position.

Electric Vehicle Market Analysis, Goldman Sachs’s Viewpoint

The pricing of electric vehicles (EV) has become a focal point for investors, as suggested by Goldman Sachs. After a series of recent price reductions by the automakers, there has been growing concern about how these reductions will influence the interplay of demand elasticity, profitability, EV affordability, and the market share in comparison with internal combustion engine (ICE) vehicles and hybrid cars.

Where is the Price Heading?

The financial powerhouse’s researchers believe that for in the US market, Tesla and Rivian need to stick to their guns where pricing is concerned. They based this stance on the study of how demand and profitability might be influenced and how attractive pricing of certain models might remain in light of IRA credits, especially.

Strategic Price Cuts: A Possible Solution?

The narrative might change for entry-level models, where strategically implemented price cuts could make sense. Goldman’s finance experts suggest this strategy might be even more effective if paired with decreasing attributes or a reduction in the bill of materials (BOM) cost.

EVs Still Alluring for US Market?

EVs, specifically battery electric vehicles (BEVs), are seen to be a considerable attraction, continuing to appeal to around a mid-teen percentage of the U.S. market. As per Goldman Sachs, this will potentially double the current levels of market penetration.

Trends in the EV Demand

While the financial institution predicts a sustained long-lasting demand for EVs in the American market, it also cautions the EV industry of a slower growth in the short to medium term. However, the analysts also anticipate a strong spread in hybrid and Plug-in Hybrid Electric Vehicles (PHEVs).

Impact of Political Outcomes on the EV Industry

Talking of potential changes in the US administration, Goldman remains neutral. Nevertheless, any changes influencing IRA credit eligibility or a repeal, could impact the EV demand by 5-15% and 10-30% respectively. The effects, however, are anticipated to taper off over time.

Long-Term EV Growth Potential

Despite these challenges, the researchers at Goldman Sachs are confident. They suspect that with the progress in global regulatory policies and improved EV cost/choice, the industry would still witness long-term growth in EV.

Strategic Investment Insights

Given this analysis, investors could consider monitoring the strategies of leading EV manufacturers closely. Keeping an eye on possible price reductions, strategic cuts, and policy changes, would help them spot opportunities for profitable investments and mitigate potential risks. Industry-wide developments and the comparison between EVs and alternatives like hybrid cars should also be on the radar for sound decision making.


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