Investor's Corner

‘Tesla Killer’ myth debunked by TSLA skeptic: Model 3 faces ‘no credible competition’ until 2020

Published

6 years ago

September 19, 2018

Simon Alvarez

Tesla stock (NASDAQ:TSLA) seems to be in the process of recovering from Tuesday’s dive over reports of the US Department of Justice’s probe into Elon Musk’s “funding secured” tweet last month, but the company’s most ambitious vehicle — the Model 3 — continues to impress even longtime skeptics. In a recent note, Toni Sacconaghi of Bernstein, who is known to be critical of Tesla in the past, stated that there is simply “no credible competition” for the Model 3 until 2020.

According to Sacconaghi, Bernstein has looked into the upcoming electric cars from several automakers set to arrive in the US within the coming years. In the case of the Model 3, the analyst pointed out that the vehicle would likely be unrivaled until 2020, when Volvo releases its all-electric Polestar 2 sedan.

“But let’s make this clear: there is no actual flood of competition coming. We tallied up every announced electric vehicle arriving in the U.S. between now and 2022, and the results were stark. The Model 3, which will account for 70% of Tesla’s revenues within two years, faces no credible competition whatsoever until 2020, or until Volvo AB launches its all-electric Polestar 2 sedan,” the Bernstein analyst noted.

Sacconaghi’s note also stated that the Tesla Model S and the Tesla Model X would likely be unrivaled until 2020 as well, as the vehicles will only be facing two competitors, the Audi e-tron Quattro and the Jaguar- I-PACE. Ultimately, the analyst noted that instead of hampering Tesla, the release of electric cars from incumbent automakers would most probably “validate and expand the existing market for electric cars.” Sacconaghi further stated that even the Chevy Bolt, which was once perceived as a “Tesla Killer,” does not really rival the Model 3.

“While matching the range and price point of the Model 3, the Bolt arguably remains a lower-end car, without the luxury nameplate, the styling, the performance, or even the electronics offered by Tesla. A side-by-side comparison in real life makes the contrast particularly stark – for one thing, the Bolt is a whole 20 inches shorter than the Model 3. GM has been relatively mum on its specific electric vehicle plans going forward, but we do not expect it to sell clear competitors to the Model 3 anytime within the next 3 years,” the analyst noted.

Toni Sacconaghi is hardly a Tesla enthusiast. Back in July, the analyst released a note expressing his reservations about the Model 3’s long-term profitability. Sacconaghi’s questions during Tesla’s Q1 2018 earnings call incited Elon Musk’s now-infamous outburst as well, with the CEO dubbing his inquiry as “boring” and “boneheaded.”

As other carmakers reveal their own entries into the all-electric market, Tesla’s experience in creating compelling EVs is starting to become evident. Thus, Sacconaghi is not alone in his observations. After Audi’s reveal of the e-tron, longtime Tesla skeptic Patrick Hummel from UBS Group AG — the same group which alleged that the $35,000 base Model 3 would not be profitable — admitted that the performance and specs of rival vehicles from veteran carmakers like Mercedes-Benz and Audi shows that Tesla would likely maintain its lead in the premium electric car market for a bit longer.

Since its steep dive on Tuesday, Tesla stock is starting a seemingly steady trek back up. As of writing, Tesla stock is trading up 1.63% at $289.61 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Related Topics:$TSLA Featured Tesla Tesla Model 3

Simon Alvarez

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Tesla stock surges on Wednesday, but there’s still more room to go

Published

6 days ago

March 12, 2025

Joey Klender

Credit: Tesla

Tesla stock (NASDAQ: TSLA) surged over 7 percent on Wednesday, canceling out some of the losses it has felt this week.

It has been a less-than-ideal start for Tesla in 2025, as the company has wiped out all of its gains felt from the victorious election campaign of President Donald Trump. The stock is down 34 percent so far this year.

The losses have mostly been felt due to reports of decreased demand due to pushback against CEO Elon Musk and his support of President Trump, as well as investor concern over the CEO’s personal use of time between the Department of Government Efficiency (DOGE) and Tesla itself.

In a note this week from Wedbush, analyst Dan Ives wrote:

“Musk needs to step up as Tesla CEO at this critical juncture. In a nutshell, the word ‘balance’ has been missing with Elon Musk and his ability to run Tesla as CEO….while instead focusing all of his energy and time driving his DOGE initiative within the Trump Administration. Since Trump’s White House 2nd term kicked off in January, we have seen Musk and Trump connected at the hip with Musk essentially living at the White House and Mar-a-Lago in Palm Beach. There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares. Trump getting elected President was a huge moment for Musk and Tesla in our view as this will create the fast track for an autonomous federal roadmap…however the DOGE efforts have now intertwined Tesla into this brewing political firestorm.”

Wednesday’s slight bump for Tesla shares is likely related to the support the company received from President Trump yesterday, who purchased a Model S sedan at the White House and pledged to pay for it with a check.

President Donald Trump buys a Tesla at the White House – Here’s which model he chose

The move was one that signaled a buying spree from high-profile Republicans, including Sean Hannity, among others, who announced their support for Musk and Tesla:

As promised yesterday, I Just ordered my new self driving Tesla! Over 1000HP, 0-60 in 2.0 seconds!
Details on how to win the Tesla of your Choice soon on https://t.co/9hkyEX1UVi! pic.twitter.com/PSCCtUsXK2
— Sean Hannity 🇺🇸 (@seanhannity) March 11, 2025
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Tesla shares closed at $248.09 on Wednesday, up 7.59%.

Investor's Corner

Tesla bull ARK loads up on over $20M in TSLA shares after stock slide

Published

1 week ago

March 11, 2025

Joey Klender

(Credit: Tesla)

Tesla bull ARK Invest loaded up on over $20 million worth of the automaker’s shares on Monday after the company saw its largest slide on the market since late 2020.

Shares dropped over 15 percent on Monday, mostly due to pushback on the stock as CEO Elon Musk heads the Department of Government Efficiency (DOGE). His involvement with the U.S. government directly has sent some investors into a predicament over Musk’s dedication to Tesla.

There are also concerns regarding Q1 deliveries, which will be a big indication of where the year could be headed for Tesla.

The Monday slide was the biggest since late 2020 when shares dropped over 21 percent.

However, the slide presents a massive buying opportunity for investors, especially those who operate ETFs, like ARK. Long term, ARK believes Tesla shares (NASDAQ: TSLA) will be exponentially more expensive, especially leaning on the thesis that Robotaxi and AI/Optimus will translate to major growth in yet another sector for the company.

ARK bolstered its position on $TSLA in its ARKK Innovation ETF with a purchase of 68,164 shares. Tesla is the largest holding in ARKK with over $531 million in value. Tesla makes up exactly 10 percent of the ARKK ETF.

It also bought another 11,154 shares in its ARKQ Autonomous Technology & Robotics ETF.

It’s no secret Tesla shares have taken a substantial hit in 2025, especially as the company’s price on Wall Street exploded following President Trump’s successful election campaign last year.

So far in 2025, Tesla shares are down over 38 percent. They are up nearly 5 percent as of 2:30 p.m. on the East Coast. Even bullish analysts are hoping some focus returns to Tesla on Musk’s part.

Dan Ives of Wedbush said in a note last night following the broad sell off:

“This is a gut check moment for the Tesla bulls (including ourselves) after this massive sell-off in Tesla shares with fears mounting/accelerating. The bears own the Tesla narrative in the near-term as lackluster sales numbers from Europe, China, and the US in January/February along with Musk protests/brand worries have created many concerns.”

He continued:

“While the DOGE/Trump Musk iron clad partnership has created major brand worries for Tesla…..we estimate less than 5% of Tesla sales globally are at risk from these issues despite the global draconian narrative for Musk. Importantly, we expect Musk will better balance his time between DOGE and Tesla/SpaceX over the course of 2025 and some of these distraction issues will fade.”

Investor's Corner

Elon Musk praises Ray Dalio’s Bridgewater for accumulating TSLA stock

Published

1 month ago

February 14, 2025

Simon Alvarez

Credit: Tesla Asia/X

A recent 13-F filing from legendary investor and billionaire Ray Dalio’s Bridgewater Associates has revealed that the hedge fund has added over $62 million worth of Tesla stock (NASDAQ:TSLA) to its portfolio.

Elon Musk has praised the billionaire’s investment in a post on X.

Bridgewater’s TSLA stake:

As per Bridgewater’s 13-F filing, it currently holds 153,589 shares of TSLA, which costs $62,025,382.
The firm added the TSLA shares in the fourth quarter.
Tesla shares gained momentum after its Q3 2024 earnings call, and it only gained more strength after the election of U.S. President Donald Trump.
At the end of 2024, Tesla shares were up 62%, as noted in a MarketWatch report.
Tesla stock is still up 88% over 12 months despite a steep drop over the past month.

Smart move
— Elon Musk (@elonmusk) February 14, 2025

A vote of confidence:

Bridgewater Associates is one of the largest hedge funds in the world, so the firm’s stake in TSLA could be interpreted as a vote of confidence in the electric vehicle maker.
Elon Musk has praised the firm’s investment. In a post on X, Musk noted that Bridgewater’s investment was a “smart move.”
Elon Musk has been quite consistent on his idea that Tesla could eventually become the world’s most valuable company. He emphasized this point during the Q4 2024 earnings call.
“I see a path. I’m not saying it’s an easy path but I see a path of Tesla being the most valuable company in the world by far. Not even close. There is a path where Tesla is worth more than the next top five companies combined,” Musk said.