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Morgan Stanley analysts questioned whether major auto companies are “blinking” on electric vehicles and said they see a buying opportunity for Tesla (NASDAQ:).
Analysts reiterated an overweight rating and $330 price target on Tesla shares in their Wednesday note.
“Big automatic blink”? It was much easier to take EV hegemony for granted when federal funds were at 0% and Tesla was a multi-billion dollar company. Are we sure that batteries are the only (or the ultimate) path to decarbonizing transport? Is the technology cheap enough? Is our electricity grid ready? Are the support policies viable? Stories such as Porsche (F:) (covered by Harald Hendrikse) were investing in e-fuels as a complementary technology to satisfying EVs to be watched,” the analysts reported.
They add that Tesla lost $600 billion in value in just three months, and that as an EV “ambassador” its valuation “raises questions about the return on investment and capital formation in the industry.” entire industry.”
Tesla shares are up more than 1% so far on Wednesday, but the stock is down more than 12% in the past week and more than 63% this year.
“Expect Tesla to use its cost and scale advantage as a competitive force,” the analysts continued. “Tesla’s price cuts have started in China and we expect them to spread quickly to Europe and the United States. Although circular in nature, the price cuts for EVs are important for the next stage of mass adoption, but depresses returns for many companies that needed to compete with Tesla.”
By Sam Boughedda