Tesla Inc. teased its next-generation vehicle at the company’s first investor day Wednesday, but provided few details about the eagerly-anticipated vehicle, prompting a pull back in the company’s stock.
The car maker’s stock fell in extended trading Wednesday and was down 6.5% before market open Thursday.
But Wedbush analyst Dan Ives believes that Tesla’s
TSLA,
story remains compelling. “While there were no specific details for the lowered price next generation Tesla in the sub $30k range as the Street had been anticipating which will cause a knee-jerk modest sell-off this morning, the stage is set for this car to be produced and scaled globally,” he wrote, in a note released Thursday.
Speaking during the event, Tesla executives said the company had to “fully rethink” its manufacturing process with the goal of improving assembly and making EVs faster and more cheaply, and with a smaller powertrain and lighter weight.
The new powertrain will be easier to scale and much cheaper to produce, according to Wedbush’s Ives. “This in our opinion will set the stage for a sub $30k vehicle likely to be introduced in a separate event over the coming year with a late 2024 target date our estimate,” he wrote.
Overall, Ives believes that the Elon Musk-led company is “at the top of the EV mountain,” while its competitors are now just making the climb. “In a nutshell, the broader vision around battery technology and removing the earth from fossil fuels was a powerful vision that Musk reiterated with Tesla playing a key role in this ambitious global endeavor,” he wrote. “For investors its crystal clear just how far ahead Tesla is ahead of the rest of the auto industry when it comes to producing and scaling EVs with last night another display of the pure breadth and scale of Tesla globally.”
Rival Ford Motor Co.’s
F,
stock is down 0.3% before market open Thursday and NIO Inc.
NIO,
is down 3.1%, while General Motors Co.
GM,
is up 0.2%. Rivian Automotive Inc.
RIVN,
which reported a fourth-quarter revenue miss and gave weak outlook earlier this week, is down 1%.
Tesla’s stock has fallen 27.5% over the last 12 months, but has risen 64.6% in 2023. The S&P 500 Index
SPX,
has fallen 9.4% over the last 12 months and gained 2.9% in 2023.
See also: Tesla recalls 362,758 EVs, says self-driving software ‘may cause’ crashes
In his note Wedbush’s Ives pointed to Tesla’s longer-term goal of eventually having 10 models of its vehicles on the road, with the company’s Cybertruck next on the docket. Tesla’s Austin factory, he added, will play a key role “in deliveries hitting the road for this key model by early 2024,” he added.
Baird Equity Research analyst Ben Kallo also believes that Tesla is well ahead of its rivals in the electric vehicle market. “Based on the information presented today, we continue to believe TSLA is several years ahead of the competition on many fronts,” he wrote, in a note. “We continue to recommend as a best pick for 2023.”
Baird reiterated its outperform rating for Tesla.
“While no next-gen vehicle was unveiled, it appears that TSLA has a clear vision and path to its introduction,” Kallo added. “The new vehicle platform is expected to improve product affordability, drive cost and efficiency improvements through innovation, and benefit from scale.”
See: Mexican president says Tesla committed to building a plant in Mexico
Of 46 analysts surveyed by FactSet, 30 have an overweight or buy rating, 11 have a hold rating, and five have an underweight or sell rating for Tesla.
Additional reporting by Claudia Assis and Jeremy C. Owens.
