Say what you will about Tesla, Inc. (NASDAQ:TSLA). However, the young electric car maker will find itself head and shoulders above anyone entering the EV market. This is the assertion of Morgan Stanley. The investment firm claims that Tesla’s current infrastructure will make all the difference over the next few years.
Following a steep drop over the course of Monday’s trading session, Tesla shares are climbing again. The rise is attributed to an endorsement made by Morgan Stanley’s Adam Jones. Jones boosted the Elon Musk business’ price target and said it is more than capable of outdoing new competition.
Investors can count on an 11 percent upside compared to Monday’s closing price. Jones slapped Tesla, Inc. shares with a price goal of $379 over the next 52 weeks. The analyst’s target for the stock came on Tuesday and represents a $62 upside compared to Morgan Stanley’s previous price target.
The company has no reason to sweat over the promises of traditional car makers. More powerful competitors have vowed to enter the EV market. These assurances from the likes of Volvo, Jaguar Land Rover and Volkswagen are widely cited within the Tesla bear scene.
The concern about Tesla losing to newcomers is fueled by the car maker’s financial position. Market watchers are in love with the company, which has climbed as much as 62 percent this year so far. However, the company’s wallet fails to inspire confidence at times. This is especially the case when investors consider Elon Musk’s car business going up against rivals with actual money at their disposal.
Despite this, Jones finds confidence in Tesla’s ability to outdo its competitors, at least in the short- to mid-term. The analyst was inspired by the company’s widespread charging network. He considers it a unique edge over the rest of the market.
Tesla, Inc. (NASDAQ:TSLA) Superchargers kill competition
Adam Jones says charging infrastructure is the “elephant in the room”. An electric car revolution can not take place without electric car owners being confident that they can get to any destination. Tesla has a growing consumer base that does not need to fret about this. With a far-reaching network of Superchargers around the world, and more on the way, Tesla owners can rest assured that they can get to their destinations regardless of the distance between point A and point B.
That is the company’s edge over competitors, according to Jones. “Tesla has made the biggest propriety investment in superchargers and destination chargers globally,” he explains. Beyond that, Jones claims that the supercharger network is larger than it needs to be. But the analyst believes this is a good thing. That is because Tesla’s fleet of sold cars is about to expand exponentially and the company will have all the means to cater to its larger, energy-hungry buyer base.
General Motors has shared plans to release a series of 20 fully electric cars within the next six years. It is promises like these from GM and other auto industry giants that have investors worried about Tesla. But Tesla’s infrastructe is the “footprint” that every EV car maker has to consider. According to Jones, it will prove to be a “key differentiator” over other competitors.
Jones pointed out on Tuesday that the American car maker’s dedication to building its car charging stations eclipses the efforts of any rival. How consumers react to the piece of mind offered by Tesla’s infrastructure will be a closely watched factor moving forward.
Bet against Tesla, Inc. shares?
On the other side of he fence, Graham Rapier of Market Insider points out a bear argument this week. It is almost mid-October and the last 30 days have been rough on Tesla, Inc. shares. This is primarily due to disappointments about the company’s Model 3 production capacity. The firm also recently pushed back the unveiling of its semi truck.
Those who have betted against the stock since mid-September have pocketed $160 million. They might be on the right side of the market, too, according to Barclays.
Monday saw Tesla fall over $13. The investment bank recently reported about an opportunity in betting against the stock. Recent setbacks will negatively affect the stock for the near-term, says Barclays. The company’s overstated capacity will give investors a more realistic view of the company’s short-term performance. The bank says that Tesla’s revolutionary “iPhone moment” can be expected later than initial projections.
To conclude, Tesla, Inc. (NASDAQ:TSLA) houses a distict edge over automakers in the form of its infrastructure. While other companies will take years to build their own recharging solutions, this piece of mind is already there for Tesla buyers. The same cannot rightly be said about other automakers.
Tesla, Inc. shares are up nearly 2.5 percent at the time of this report’s release. The climb sees the stock regaining much of the value lost during the week’s initial trading session.