According to Adam Jonas of Morgan Stanley, Tesla Motors Inc ’s next big thing could be ‘selling miles, not just cars’. In a note to clients on Tuesday, Jonas said, “Tesla is likely to eventually more clearly communicate any potential plans for a mobility service (selling miles, not cars) to investors.”
Will Tesla enter the new business?
Jonas speculates that the electric car maker would announce a ‘mobility app’ in the next 12 to 18 months, but there exist a degree of uncertainty about it.
During the Tesla Motors earnings call, Jonas asked CEO Elon Musk if there was a possibility of Tesla becoming like Uber. Jonas asked Musk that in case Tesla Motors becomes the leader in autonomous cars, would Musk consider selling driverless cars to ride-sharing firms or will he prefer to cut out the middleman and make use firms own platform for offering on-demand electric mobility services?
Musk declined to answer the question, but said it was a smart question. However, after some prodding Musk replied that Tesla does not have a fully baked strategy in that regard, adding “We’d prefer to announce something when we think we’ve the full story understood.”
Jonas said that in the coming years, investors will be more interested because of broader industry developments in driverless cars and shared mobility.
He added that Tesla Motors Inc could be the firm that could solve the biggest flaw in the car industry i.e. cars sitting unused most of the time. Around the world the Model S sits at night collecting dust when it could be used to drive people around.
Morgan Stanley has left Tesla Motors price target unchanged at $450, but has included ‘Tesla Mobility’ in its model for the company. When Mr. Jonas first saw the mobility opportunity, he boosted the price target right up to $465.
Delivery guidance – will Tesla meet it?
Tesla Motors gave a delivery guidance of 50,000 to 52,000 cars. This number is at the low-end of the original guidance, but is within the range. The big concern among the analysts has been that Tesla might not be able to meet the expectations. However, Jonas like always is bullish on the EV firm.
But the analyst warns that Tesla Motors Inc may fail at meeting its guidance the Q4 or next year even. Tesla Motors is expected to produce several Model X SUVs in a week by the year end, and Jonas expects the firm to deliver 1,500 cars in the Q4 and 20,000 in all of next year. Jonas said his estimate is half of Wall Street’s expectations for the Q4.