Credit Suisse Picks Tesla As One Of Its Favorites For 2015
Looking for new stock to add to your portfolio in 2015? Credit Suisse has one for your consideration: Tesla.
Bidness Etc reports the investment firm’s analyst picked the Californian EV automaker as its one of its favorites in the Auto and Auto Parts Industry category. Dan Galves, who led the investment research on Tesla, says the automaker’s biggest selling point for the medium term is its Gigafactory and lithium-battery pack technology. He and his fellow analysts believe the main goal of the factory — to reduce production costs — is probable, with parity compared to coventionally powered vehicles to come by 2017.
Credit Suisse also projects the Model X — when it finally does arrive — “will be a potential positive catalyst in the process of slowly shifting the industry toward EVs.” Increased production volume visibility during H2 2015 is also expected to provide a view of the automaker’s EBIT margin potential, with the firm bestowing an Outperform rating and a $325 price target on the stock.
Tesla and the myth of the giga factory. Does anyone really believe there will be a market for the output of this factory? Because the only way such a factory will achieve cost reduction is through fully production potential and utilization. I say the market doesn't exust and won't exist. And it will be delayed, again and again, just like Tesla's other products. Besides, you can't trust the Swiss...
The people at Credit Suisse must be on crack. The cells used by Tesla are already mass-produced commodity cells; that was one of the smart things the Tesla people did. The Gigafactory is not going to make revolutionary changes in cell cost. Nor is it going to make revolutionary changes in energy density (by volume or weight). The real threat to Tesla is Nissan and, later, when Ford, VW, Honda, Toyota, Kia, etc, look at cell prices and capacities and decide it's time to jump in with vehicles they aim to sell at the 100K+/year level. Especially Nissan. the Leaf is not a bad vehicle, sells tolerably well and is much closer to mainstream price points than any Tesla. The Gigafactory will put downward pressure on all cell prices, which will work to Nissan's advantage, no matter where they get their cells. Advances in cell tech will be as available to Nissan and the others just as they are to Tesla. These companies know how to make value-oriented cars. Once you know how to build a car, you can build any EV that Tesla can build. These companies have showrooms all over the country and dealer support. Tesla has less retail presence than Mazda or Volvo. I don't see a bright future for Tesla. I also note its short interest is at 25% of float. It had been at 45-50%. I am not a sophisticated investor but that seems pretty darned high and I would guess a lot of earlier short sellers have now covered and done pretty well. Maybe Credit Suisse sees an opportunity to benefit from a short squeeze but that's not investing, that's speculation. That said, I respect Musk and I'm not inclined to bet against him. My plan is simply to stay away from TSLA.
Stop trying to make Gigafactory happen. It's not going to happen!
Also, dark wheels on the Model S makes it look trashy.