With the adoption of electric vehicles underway, and with more and more veteran automakers dipping their toes in electric cars, EVs like the Tesla Model 3 are bound to see some competition. This would be notable in coming years, with vehicles like Volvo’s Polestar 2 expected to enter the market as early as 2020. Despite this influx of EVs, Tesla (NASDAQ:TSLA) bull and Loup Ventures Managing Partner Gene Munster argues that the Model 3 will likely remain unchallenged.
Currently, there are 17 EVs available in the US market. This is a notable increase from 2018, when there were only 11 that were available for purchase. By next year, there will likely be 24 all-electric cars that buyers could choose from. Munster argues that the majority of these vehicles could be divided into two categories: those that are priced above $70,000 and those that have a rated range below 130 miles. All of these, including the highly-anticipated Rivian R1S (which starts at the ~$70,000 range) or the Mini EV (which has a range of 135 miles), are not mainstream vehicles due to their cost or limited range.
For an EV to be truly mainstream, Munster noted that the vehicle must be priced below $40,000 and have a range above 225 miles per charge. Only five electric cars in the US today meet this criterion: The Tesla Model 3 Standard Range Plus, the Chevy Bolt EV and the Volt, the Hyundai Kona Electric, and the Kia e-Niro. Munster noted that among these options, the Tesla Model 3 is the “clear winner in terms of value,” and this is something that would likely continue to the coming year. Even with the upcoming competition in 2020, the Model 3 will likely be “unchallenged in its EV value proposition,” the analyst wrote.
Tesla’s year-to-date EV market share stands at a dominating 75%. According to Munster, he expects this to decline to about 20-25% over the next ten years. Provided that the US auto sales stabilize at around 18 million per year, and provided that electric car adoption becomes widespread, Tesla’s sales in the country could end up yielding around 3.6-4.5 million vehicles per year. This is notable growth, considering that Tesla is expected to deliver just over 200,000 vehicles in the US this year, as part of its estimated 360,000 global deliveries in 2019.
A key factor in this expected continued dominance is Tesla’s increasingly apparent 7-year headstart in the electric vehicle market. Munster argues that this headstart allows Tesla to enjoy a lead against its competitors in terms of batteries that are more efficient compared to other EV manufacturers, a vertically integrated Supercharger Network that’s easier to use compared to third-party charging stations, and dedicated full self-driving capabilities that are specifically tuned for the company’s vehicle lineup. These factors complete the Tesla ownership ecosystem, and all of these are present in the electric car maker’s entry-level offering, the Model 3 Standard Range Plus.
The narrative of Tesla’s upcoming competition has proven prevalent over the past years, with critics of the company dubbing electric cars such as the Jaguar I-PACE, the Audi e-tron, and the Chevy Bolt EV as potential “Tesla Killers.” As vehicles like the Model 3 continue to prove that Tesla is a moving target, and as companies like Jaguar and Audi exhibit teething problems with the I-PACE and e-tron, the gap between Tesla and its rival automakers continues to become more pronounced.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Tesla Full Self-Driving lands in a new country, its 7th
Tesla CEO Elon Musk teases insane capabilities of next major FSD update
