Goldman Sachs Reaffirms ‘Neutral’ Rating on Tesla

Goldman Sachs analyst Mark Delaney reiterated on October 8, 2025, its $425 price target on Tesla, while maintaining a ‘Neutral’ rating on the stock.

“On 10/7/25, Tesla listed new lower-cost or so-called Standard variants of the Models 3 and Y on its US website that have certain features removed (e.g. no panoramic roof, no ambient lighting, no 2nd row screen display).

The starting price for the 3 is now $36,990 and the starting price of the Y is now $39,990 in the US, or 10-15% lower than the prior entry-level trims.

While we think the broader 3/Y lineup offers good value in general (based on features like acceleration and safety), the degree of differentiation on price and features/form factor for the Standard trims is more limited than we had initially expected for Tesla’s lower cost models (although Tesla’s CEO suggested on the last earnings call that the lower cost version was going to be a variant of the Model Y).

Recall that at one point Tesla was aiming to produce an all-new model with a cost that was about 50% lower than the 3/Y platform (and the path to achieving this was a key aspect of its March 2023 investor day).

The company then noted on its 1Q24 call that the new models would instead use aspects of its current models, which would result in reduced cost savings relative to an all-new platform but allow for better utilization on the current manufacturing lines plus a faster time to market.

We show volume by price band analysis in this note, and the relatively moderate cost reduction (especially with IRA credits gone) coupled with reduced features for the Standard trims may result in a somewhat limited effect on incremental volumes.

At least for now, these variants are only offered in the US.”

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