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Tesla stock down 3% after new Model Y SUV confirmed

The car company's shares are down after confirming a new SUV will be released.

Tesla stock is down after chief executive officer, (CEO), Elon Musk, announced that there will be a Model Y sports utility vehicle (SUV) released on March 14. The news of the SUV comes just days after unveiling a $35,000 Model 3 sedan.

What features will the Model Y have?

Musk tweeted about the new Model Y and described the features of the car. Reports noted that the SUV will be made of 75% of the same parts as the Model 3.

‘Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery,’ tweeted Musk.

Musk also promised more details about the Model Y, such as the price of the vehicle, will be revealed when the car is unveiled.

‘Detailed specs & pricing will be provided, as well as test rides in Y,’ wrote Musk.

Why did Tesla stock fall after the Model Y announcement?

Despite the news of new vehicles from Tesla, the carmaker’s stock has been volatile amid other news about Musk. When he announced the more affordable Model 3, Musk noted that that the corporation may not be profitable in the first quarter(Q1) of 2019 because of the adjustments needed to control costs. Investors were nervous after that frank assessment, and that could have contributed to the stock’s decline.

Tesla’s stock is also possibly plummeting after more news about Musk being in trouble again with the US Securities and Exchange Commisssion (SEC) . The agency wants him to be held in contempt by a judge after controversial tweets Musk made about the agency.

Will consumers buy the Model Y?

There is a mixed consensus about demand for the new Tesla vehicle. Some financial experts believe that the Model 3 may decrease interest in the SUV. However, Ben Kallo, analyst at Baird, was optimistic about demand for the Model Y.

‘We think the SUV market is larger than sedan and growing more quickly in the United States, and we think the introduction of a more competitively-price[d] vehicle could drive higher sales and share gain,’ wrote Kallo in a note to clients.

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