Remember this name: the Audi R8 e-tron. It’s the first electric car to outdo Tesla’s Roadster and Model S with a 280-mile range (that beats Tesla’s Model S by 10 miles or 3.7 percent).
Let’s get this out of the way: the R8 won’t directly compete with Tesla’s cars. For one thing, it’ll likely cost more than twice as much as the Model S with some analysts expecting a $200,000 sticker price. Sales will also be via special-order fulfillment only. Still, the e-tron’s a warning shot that should have Tesla investors nervous. Audi’s serious about capturing electric-car market share. They’re even taking a page out of Tesla’s playbook by first launching a supercar (comparable to the Tesla Roadster), which will help them fine-tune their technology.
Powered by a 92kWh t-shaped lithium-ion battery pack, the Audi has a higher top speed than the Model S (155 mph versus 130, though both are electronically limited) and a much faster charge time. Audi also claims the e-tron can charge in “significantly less than two hours.” That’s phenomenal considering standard charge time for the Model S can take more than 9 hours with a 240-volt outlet (superchargers are, of course, faster).
The Model S may have a slight edge in acceleration, though we don’t have an exact comparison. Published numbers say the Audi can run from 0-62 mph in 3.9 seconds. The Model S can do 0-60 in 3.2-seconds.
The most exciting part of the announcement is this: Audi’s e-tron will be a “mobile high-tech laboratory” (source). The company’s using the supercar as a test bed to push the envelope. They’ll take what they learn to develop and launch a fleet of sedans and other Tesla competitors.
Interestingly, Tesla and Audi have similar market caps. Tesla’s worth $24.38 billion vs. Audi’s $29.58 billion. The difference is the fact that Audi’s actually profitable. The German automaker’s trading at a P/E ratio of 7.12 while Tesla’s burning through as much as $300 million per quarter.
This is just the beginning of a global war. Electric car technology will change everything about transportation and that means we’re going to see a whole lot of other competitors come to market. In many ways, it reminds me of the tech bubble in the 2000s. There’s just so much potential in the space that investors can’t help but get excited. Just remember that the sexiest companies don’t prevail. The company’s that do are the companies that know how to execute and make money. Audi’s already proven it can do both.
Tesla Motors Inc. (NASDAQ:TSLA) had revenue of $956 million last quarter. That doesn’t sound bad until you consider the company’s operating expenses of $1.031 billion. Tesla’s burning through cash, but shares in the electric car-maker are still holding onto a $24 billion market cap.
That’s stoked fire under David Stockman, Former Director of the government’s Office of Management and Budget. Tesla, he says, is “a crony capitalist con job that has long been insolvent and has survived only by dint of prodigious taxpayer subsidies and billions of free money from the Fed’s Wall Street casino.”
If you follow comments from Tesla’s CEO Elon Musk, you already know Tesla’s biggest problem is keeping up with incredible demand for the company’s cars. Analysts, however, are starting to call foul. John Lovallo (Bank of America Merrill Lynch) went so far as to lower his price target on the stock to $65 based on what he says are demand problems at Tesla.
Is the market really overvaluing Tesla by almost 70 percent? If you believe numbers from Paulo Santos, Think Finance (source), perhaps it is. Here’s a chart showing Tesla’s production through Q4 of 2015, along with Santos’ estimate for Q1 in 2015:
If you’re looking for all the bearish arguments against Tesla (TSLA), look no further than analyst John Lovallo of Bank of America Merrill Lynch. Earlier this week, he lowered his price target for the electric car maker from $70 to $65 (per Business Insider). That’s 68 percent less than the stock’s trading at right now (around $204)!
Lovallo believes Tesla’s grossly over-valued for one reason: lack of demand. Tsk-tsk, says Tesla CEO Elon Musk. Demand’s not he problem, supply is. Why then, Lovallo wonders, are Tesla’s factories underutilized?
I was having dinner with a longtime friend recently and dividend stocks came up in conversation. “Why would I want to invest in dividend stocks at 3 percent, when I can invest in real estate and make a whole lot more?” he asked.
That question always make me wince.
Tesla’s biggest cheerleader has to be Global Equities analyst Trip Chowdhry. Chowdhry’s way out in front of the average Tesla price target of $277.50. His price target? $385. That’s more than 75 percent higher than the stock’s current price. Why’s Chowdhry so bullish?
If you’re in search of the ultimate Tesla (TSLA) bull, look no further than Trip Chowdhry of Global Equities Research. He has a $385 Tesla price target. That number’s not based on current car sales; it’s based on the notion that the world’s entire transportation ecosystem is on the cusp of a revolution. And Trip Chowdhry believes Tesla’s leading the charge.
1) Tesla must hit its second production target date on the Model X. Tesla’s developing something of a reputation for missing its production targets. It happened with the Model S, and it already happened once with the Model X.
Speculation’s running rampant that Apple’s angling to get into the automotive industry. There are two theories here:
- Apple wants to make its own car.
- Apple’s working on software for autonomous or semi-autonomous vehicles.
On the face of it, the idea of software for self-driving or partially self-driving cars seems more likely. But it’s unclear if Apple’s content to stop there. Let’s look at the facts we do have.
Most investors have a hard time conceptualizing just how large Apple has become. They’re the single largest stock on any U.S. exchange with a market capitalization north of $750 billion. That means they’re 3/4 of the way to a $1 trillion market cap.
To put that in perspective, the entire U.S. economy’s GDP (our country’s entire economic output for a year) is calculated at around $16 trillion!