Yesterday evening, Tesla CEO Elon Musk published part two of the company’s not-so-secret master plan for automotive domination. With part one of the plan effectively accomplished – culminating with the 2017 release of the Model 3 – part two details Tesla’s ambitious plan for the future, a vision that includes electric busses, a proliferation of solar power, pickup trucks, and a fleet of fully autonomous Tesla vehicle.
In the wake of Musk’s recently published plan, some of the bigwigs on Wall Street have already begun to weigh-in on Tesla’s goals. For the most part, analysts appear to be satisfied with Musk’s vision of the future, though a few analysts expressed concern regarding Tesla’s plan to finance their grandiose ideas. As for the more immediate impact on Tesla stock, shares of the company were down 3.75% today.
Earlier today, The Street provided us with a recap of some of the more notable and interesting analyst notes that emerged following Musk’s note yesterday.
Up first, Rod Lache of Deutsche Bank, while not finding anything terribly new in Musk’s statements, found it compelling nonetheless. One area of concern, though, is whether Tesla’s planned acquisition of Solar City is in fact a shrewd business move.
And while it goes without saying that all aspects of the plan involve very high levels of execution risk, we continue to find the “Tesla Motors” plans, which are encompassed in Parts 2, 3, and 4, as innovative and potentially compelling. We continue to work on better appreciating whether Solar is in fact a “good” business for Tesla shareholders.
Second, Adam Jonas of Morgan Stanley — a Tesla bull who has long championed Tesla’s foray into the ridesharing business — had this to say.
Given the company’s rate of cash consumption, to put this innovation into action, Tesla must fund the plan with large amounts of external capital. Tesla management have demonstrated a strong ability to convince investors of the validity and scope of its business and technological ambition. The expansion of business scope announced last night is very significant, likely requiring substantial deployment of capital and potentially many years of upfront losses to see to fruition…Absorbing the losses at SCTY while funding its further expansion could likely add a further investment burden on top of all that. These are big markets and we understand they require large capital investments, time and execution risk to address…We do not have enough detail from Tesla to offer any specific analysis or observations of their shared/autonomous services at this time…We’d say the Master Plan Part Deux is pretty darn down the middle of the fairway of our expectations. With one exception: Tesla Semi. We did not see that coming at all. Commercial vehicle transport is a very different end market, with different customers, engineering demands, vehicle demands and infrastructure.
Make sure to hit the source link below for the full run down of what Wall Street had to say about Tesla’s take on the future of driving.