Tesla shares have fallen after an analyst predicted it would take longer for the company to be profitable than was initially forecasted.
Jefferies analyst Philippe Houchois launched coverage of Tesla with an “underperform” rating and this sent shares plummeting.
“Achievements to-date and vision are impressive, but we don’t think Tesla’s vertically integrated business model can be scaled up as profitably and quickly as consensus thinks and valuation multiples imply,” Houchois said in a research note.
Elon Musk who owns Tesla is counting on the Model 3 to open up the market, with the new series of electric car only $35,000USD (sold for $70,000AUD in Australia and $108,000 in New Zealand)
The standard S Model 3 comes with a 75kw (480km range) battery and comes with $5,000 in petrol savings (over 5 years)
While its not the full electric model (more like a hybrid), consumers looking to save petrol will be interested in the new car as petrol prices soar with NZ prices hitting $2.05per litre for 91 with Australians finding life above $1 is now the new norm, with most stations at around the $1.20 mark.
But Skeptics believe Tesla’s aggressive production targets are unrealistic despite the demand for more fuel efficient cars, and that Musk is burning through cash too quickly with the company’s electric cars, risking being overtaken by larger automakers.
And this is all true as well, several carmarkers, Porsche, BMW, Audi, are all about the electrification of cars, but it wont be the ones who make the nicest or most expensive car that will win this race.
Tesla risks being disrupted by a carmaker who can produce a simple electric car that is affordable, and a $70,000AUD or $108,000NZD car is not affordable.
The average wage for Australians is just over $80K, While NZ average wage is $70,000
While his production targets are not unrealistic, the price tag is and this will be what slows down most auto manufacturers.
But there is one manufacturer who might be able to crack the production costs and bring prices down… Toyota.
Toyota is set to release a fast charging long range electric car in 2022 that can be powered up in minutes, and while it wont have the luxury or the bells and whistles of the Tesla, the fact that its priced more affordable will be its appeal to the mass market.