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Tesla Inc shunts Apple Inc. iCar to irrelevancy

Tesla Motors Inc. (TSLA) Model S

Tesla Inc may soon face a rival in the autonomous car space. Apple Inc. CEO Tim Cook confirmed this morning that his firm is working on an autonomous driving system. At least one Wall Street analyst thinks that Apple might have lost its chance. Berenberg analyst Alexander Haissl says that Tesla Inc has a near monopolistic opportunity.

Tesla Motors Inc. (TSLA) Model S

Mr. Haissl did not directly consider autonomous tech in his report. His point was instead simpler and more powerful. Tesla Inc has been doing exceptionally for years, and we’ve yet to see any real competition emerge. The firm is now building a substantial moat in its brand and production capabilities. What Apple Inc. , or any other potential market entrants do at this point may be irrelevant.

Tesla Inc stock pulls away

Haissl says that “Tesla’s disruptive potential encompasses the vehicle, the entire production process and the product-to-market strategy.” Following on he says that legacy car makers are stymied by inefficiencies and older production plant costs.

The analyst’s price target on Tesla stock hit $464 in this latest report. That’s up from $193 in its previous release. The firm has managed to beat the risks of its formative years in the view of Berenberg. Now it’s ready to pull ahead, a move that could be hurdle on Apple’s path to the car market.

In his interview with Bloomberg News, Apple Inc. CEO Tim Cook didn’t give too much away about the firm’s driving project. “We’re focusing on autonomous systems,” he said, “It’s a core technology that we view as very important.”

Importantly, from the point of view of those that hold Tesla stock, Cook said “We’re not really saying from a product point of view what we will do.”  Apple simply won’t commit publicly to working on a car, and given the cards held by Elon Musk, any release could be postponed indefinitely to avoid diluting the Apple brand.

Competition is risky for Tesla Inc

Since Elon Musk began working on electric cars, his firm has always operated somewhat separately from the rest of the market. As more and more firms work on electric cars, analysts have long seen direct competition as the main risk facing Tesla Inc. stock. With autonomous driving systems set as the new arena, it may be pulling away too quickly to catch.

On Monday Morgan Stanley dramatic reassessed the risks facing the firm. Adam Jonas, who studies Tesla stock for the bank, raised his bearish price target from $50 to $175. The basis for the change was similar to the reasoning behind Berenberg’s report on Tuesday.

Tesla Inc is ahead of everyone, including Tim Cook’s Apple Inc. , in autonomous driving tech. The firm is way ahead of Cupertino in production capabilities despite the many hiccups along the way.

Can Apple still catch Tesla? Is competition a danger to Tesla stock? The answer to both questions is a resounding yes. But what’s important on Wall Street is risk levels and expectations. A lot of analysts are coming around to the idea that Tesla Inc stock has a substantial moat. That may be enough to force Tim Cook to abandon hopes for an iCar and focus instead on making tech it can sell to established manufacturers.

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