As Tesla stock (NASDAQ:TSLA) battled a fresh wave of criticism following the release of its Q1 2019 vehicle production and delivery report, the company saw a supporter from a rather unlikely place. During a segment on Fox Business Network‘s Mornings with Maria, one of the show’s panels boldly defended Tesla, calling for more support for the company due to its industry-changing innovations.
Tesla and Elon Musk’s court appearance with the SEC was the primary topic in the segment, and the show brought on ARK Invest analyst Tasha Keeney to get her insights on the electric car maker. ARK is among the most bullish supporters of Tesla, with the firm setting a $4,000 price target for the company’s stock provided that it enters the autonomous ride-sharing market. Speaking to the show’s hosts, the ARK analyst reiterated her firm’s stance on the company as a potential leader in the self-driving market.
Dagen McDowell, a longtime finance journalist and one of the panels in Mornings with Maria, pointed out that Tesla’s edge is evident even at its current state where it does not have a consumer-ready full self-driving suite. McDowell argued that among the prominent automakers today, Tesla is the leader when it comes to vehicle software, an emerging industry that could be worth up to $1.2 trillion by 2030.
“You don’t even need to look ahead to autonomous vehicles. I had this discussion with someone I’m close to over the weekend who works in Silicon Valley. Every other automaker, even luxury automakers in Germany, Japanese, and American, they are awful at software. There is no other car and no other car company that compares to a Tesla. We all, as drivers and consumers, ought to be rooting for this company. You don’t have to own stock in it, but you ought to root for them because hopefully, all these automakers will realize, ‘Oh, our software stinks,'” McDowell said.
There is no doubt that Tesla is still learning several key aspects of the vehicle manufacturing process. The company is only turning 16 years old this year, and over that time, it has transformed itself from a niche carmaker that made a very quick and expensive car for the rich to a company that is on the brink of disrupting the mass market auto industry. At its core, Tesla is still a young company, and its lack of expertise in areas such as fine manufacturing processes is understandable, especially considering the number of vehicles it is producing today.
What Tesla has mastery of is vehicle software. Since the days of the first-generation Model S, the company has proven to be far ahead of competitors. Keeney named Tesla’s free over-the-air updates as a prime example of this, since the company’s more experienced rivals are largely still unable to implement the same system on their own vehicles. McDowell proved bolder, flat-out stating that traditional automakers simply don’t know how to make tomorrow’s vehicles. “It’s because they’re dug in and they don’t know how to run a car company in the new century. That’s literally what these companies look like. I’m surprised that Apple and Google haven’t done more to try and manufacture a car or produce software for one,” she said.
Tesla might be ending the week as volatile and polarizing as ever, but the company seems to be heading towards some calmer waters ahead. With the first quarter done, Tesla can now focus more on producing and delivering its vehicles in the second quarter. The over 10,000 vehicles in transit at the end of Q1 could actually work in Tesla’s favor in Q2, as the company will be starting the quarter with over 10,000 electric car sales.
Apart from this, Elon Musk and the SEC’s court hearing proved to be far less dramatic than what the company’s critics have wished. Prior to Musk’s appearance in court, speculations among Tesla skeptics pointed to the possibility that he would be stripped off the CEO’s title, and possibly even fired from the company. Over the course of the hearing, Judge Alison Nathan proved incredibly objective, asking the SEC to clarify if Musk would need to get approval for tweets that reiterated information that had already been disclosed. She also asserted that government lawyers must take all steps necessary to reach a resolution before invoking contempt.
At the end of the hearing, the judge urged Elon Musk and the SEC’s legal team to “take a deep breath, put your reasonableness pants on, and work this out.” Musk did not speak during the hearing, though he did state that he was “very impressed with Judge Nathan’s analysis” as he was leaving the courthouse.
As of writing, Tesla stock is trading +2.01% at $273.15.
Watch the recent Tesla segment in Fox Business Network‘s Mornings with Maria in the video below.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.