Tesla Is World's Most Important Auto Maker, Says Tesla Debt Underwriter
A recent research note from Morgan Stanley dubbed Tesla the “world’s most important auto maker”, on account of its innovation in the area of electric vehicles, autonomous cars and connectivity. Could there be another reason for such enthusiasm?
Observers will remember that earlier this year, Morgan Stanley raised its share price for Tesla to $320 per share, amid talk of Tesla disrupting the energy sector with is new battery-producing gigafactory. One day after that, Tesla announced a $1.6 billion debt offering underwritten by…Morgan Stanley.
In the case of the $320 share price target, analyst Adam Jonas was wildly optimistic about Tesla, even suggesting that the company could help bring about a “utopian society” by 2026. Jonas is also the same analyst labeling Tesla as the most important car maker…in the wuurrlld.
Coincdence? A massive breach of the Chinese Wall? Or a symptom of a press corp that is near-universal in its reluctance to “disrupt” Tesla’s brilliant PR narrative (hip, successful entrepeneur from Silcion Valley looking to topple one of Industrial America’s most sclerotic, antiquated industries)? Likely a combination of all three. Or, tell me why I’m wrong in the comments.
More by Derek Kreindler
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I thought this axe grinding was going to end with the changes at TTAC. Frankly TTAC has had a horrible track record with Tesla and can't just seem to let it go. Is Tesla the most important car company out there? From an innovation and aggressive strategy context - absolutely. They have bypassed the traditional strictures preventing electric cars including setting up their own charging network. They have bypassed the almost universally consumer-hated dealers (who are a big portion of your readership given the massive pandering that goes on here and which, I suspect, is the real reason for these articles). And they are planning to bring out a very affordable electric car that may represent the biggest and most credible effort yet. If you want to bet against Elon Musk, you are taking long odds as this is a guy who has delivered time and time again on very outlandish ideas.
For all of Tesla's "disruption", the company is staffed primarily by people who worked for other automakers. They still have an office in the Detroit area with about 2 dozen engineers.
I could tell you Derek, but I doubt you would still get it given your staked out position on the subject, but I will tell you this... It has nothing to do with 'Tesla versus the OEM's'. As far as the Morgan Stanley hype...hey! Its capitalism in America...No matter what... Sell! Sell! Sell!
Telsa isn't the future without significant government support. ICE engine will reign as the predominant source of motive power for at least the next several decades and longer. How much lithium is there to mine cheaply and easily. Morgan Stanely are taking a gamble. Remember how much cheap and easy money there sloshing around is out there and how much of this cheap and easy money is not invested wisely. Yellen will keep that money coming, investment houses are addicted to the stuff. Even the EU is heading down that road with the Japanese. The money must be spent.