Credit Suisse predicts Tesla shares to plunge 40 per cent
Analyst points to growing competition from Ford
In a note to investors, Credit Suisse has predicted that will not be able to sustain its dominance in the American electric vehicle market and could see its share price dive by as much as 40 per cent.
Analyst Dan Levy observed: “For all the competition entering the market we are still awaiting the EV that will be a true competitive threat to Model 3 – especially in the US. Tesla has a window of opportunity now with a clear competitive lead.”
Since it began covering the stock in , Credit Suisse has had an Underweight rating on Tesla. Its $200 price target is more than 40 per cent below the stock’s latest close of $346.11.
Levy stated that while Tesla might currently comprise 80 per cent of the current electric vehicle market, soon enough it will not be “the only game in town”. He pointed towards ’s upcoming Mustang-inspired Mach-E stating: “The launch marks the first real milestone in Ford’s increased emphasis in electrification, and more importantly marks an increased effort by the legacy US automakers to be relevant in electrification.”
Tesla has been one of the most short sold stocks in recent months. The announcement of a new major Tesla manufacturing plant in China wrongfooted short sellers earlier this month with their cumulative losses estimated to be over $1.5bn (£1.16, €1.36).
Levy observed that: “Tesla continues to struggle with the basic ‘blocking and tackling’ of the auto business (i.e., manufacturing, delivery logistics, service),'' adding that “It risks not capitalising on this opportunity.”
Comparing Tesla’s Model 3 with Ford’s BEV alternative he stated: “Ford’s new BEV should provide a more compelling alternative at the Model 3 price range than the other comps, especially given the performance focus.”