Tesla: Analyst Predicts Solid Future Demand for Model 3



Tesla Model 3

In the previous part, we looked at Tesla (TSLA) CEO Elon Musk’s recent tweet in which he urged car buyers to choose electric cars over gasoline cars. In the tweet, Musk not only tried to market Tesla Model 3 by noting its key benefits but also listed electric cars made by other automakers including BMW, Fiat, Hyundai, General Motors (GM), Ford (F), and NIO (NIO). Now, let’s move on by looking at an analyst’s view about the future demand (IWB) of Tesla Model 3.

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Analyst predicts solid demand

According to a recent CNBC report, Wedbush Securities analyst Dan Ives expects Tesla Model 3 demand to remain “very strong into 2019 and beyond.” In a note, Ives predicted that “underlying drivers for the electric vehicle market” would increase the demand for Model 3 in the coming years, especially “at a time when many automakers are abandoning sedans in favor of SUVs.”

The analyst also suggested that due to this high demand for Model 3, it won’t be necessary for Tesla “to raise capital again in the near future.” Ives estimated the company’s 2019 capital expenditure to be between “$2.2 billion to $2.3 billion.” In addition, Wedbush Securities is also positive about Tesla’s future growth in the European and Chinese market.

Other analysts on Tesla

Many analysts have changed their opinion on Tesla in the last few months. In September 2018, Nomura Instinet analyst Romit Shah, a long time Tesla optimist, called Tesla “no longer investable” in a note to clients, CNBC reported. After Tesla reported surprise profitability in the third quarter, a long time Tesla bear, Andrew Left from Citron Research, surprised the market by turning positive on TSLA for the first time.

Tesla is likely to report its fourth-quarter vehicle production and delivery figures (IYK) (IWF) (XNTK) in the first few days of January, which could make its stock volatile in the coming sessions.

On a year-to-date basis, Tesla has risen 1.5% against 4.7% losses seen in the NASDAQ Composite Index (QQQ). GM and Ford have lost 17.2% and 36.4% in 2018 so far.


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