Morgan Stanley analyst Adam Jones – who is a strong supporter of electric car maker Tesla – published four worrisome bullet points to consider regarding the rocketing rise of Tesla’s share value. As a result, stock prices fell about 9 percent on Monday, to $253.86. Still, way, way above IPO.
Tesla CEO Elon Musk himself has noted that Adam Jones is right, in that “the share price was a bit ahead of itself.” So what were these four sobering things to consider in regards to Tesla? According to Jones:
- Electric vehicle sales are failing globally.
- Electric vehicle growth will almost certainly be limited in China, the world’s second-largest global consumer.
- The widespread advent of battery-powered cars requires a variety of still-pending technological advances.
- The future promise of self-driven cars threatens Tesla’s existence in the long term.
These considerations certainly aren’t without merit; breaking into the Chinese market in particular will undoubtedly prove difficult for Tesla Motors, and with a full year likely to pass before we see any functional Tesla Gigafactories, there will be plenty of opportunities for the young electric-car star to miscalculate their own growth potential.
But still, it seems awfully premature for the market to concern itself with the future possibility of self-driven cars, which wouldn’t necessarily have to be a hurdle for the marque at any rate. This is not to mention that Tesla Gigafactories are planned as one of the very solutions to bullet point number 3, that of the yet-pending technological breakthroughs.
Perhaps the previously “overweight” bloating of Tesla Motors’ share value was a bit before its time. But then, isn’t the automaker itself?