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Tesla’s inventory rises to its peak after posting record quarterly delivery figures and sustained support from analysts, but not everyone in the street believes in the EV manufacturer.
Gordon Johnson, CEO of GLJ Research, told CNBC on Monday that he is not impressed with Tesla’s recent delivery figures. The CEO holds a price target of $ 67 on the shares of the EV leader.
Johnson argued that Tesla’s barely growing ‘despite ’15 price cuts in the first quarter of this year’ in its interview with Morgan Brennan of CNBC and Gene Munster of Loop Ventures.
The equities research chief said that ‘year-on-year growth is irrelevant’ at Tesla due to changing sales patterns and a Chinese rollout, noting that the EV manufacturer saw only 2% consecutive growth from the fourth quarter of last year to achieved the first time. quarter of this year.
According to Johnson, Tesla ‘has borne the brunt of entering the world’s largest three car markets, the US, China, Europe, and their sales have grown by only 2% quarter over the quarter, despite 15 price reductions in the first quarter of this year, 18 prices cut in total last year, selling another 52,500 cars. ‘
Johnson also noted that Tesla “sold significantly fewer S and X cars with a higher margin and Model 3 and Y cars with a lower margin in the quarter significantly less.” According to the CEO, it could be a success of between 300 and 500 million dollars.
“So you’re looking at a company, a high-growth company, that is barely growing, and is losing more money and thus all its credit sales are going to disappear next year,” Johnson said. “We see it as a big problem.”
Johnson referred to tax credits that Tesla buyers receive for purchasing an electric, emission-free vehicle. The credits will disappear in 2022, but some analysts believe that President Joe Biden’s $ 2.3 billion infrastructure plan will restore it before that happens.
Johnson also compared Tesla to Volkswagen in the interview, arguing that Tesla’s current valuation does not make sense in relation to its peers.
Tesla is valued at nearly $ 700 billion despite selling only 184,000 cars in the first quarter, while VW sells about 2.5 million cars per quarter and about $ 140 billion.
Some say Tesla’s valuation is based on its growth, but with the EV maker’s sales increase of just 2%, Johnson said he does not ‘know what people are talking about when they say it’s transformation growth.’
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Gene Munster, founder of Loup Ventures, commented on Johnson’s argument, saying he believes it is unfair to look at consecutive growth because the first quarter is a ‘seasonally light quarter’.
Munster said he believed competition was the biggest risk for Tesla, but as long as “the value of the car exceeds the competition”, Tesla will be able to “have a measurable share of a massive total accountable market.”
Dan Ives of Wedbush made a note on Monday in which he upgraded Tesla to a “better performance” and marked a $ 1000 price target on the EV giant.
The analyst said he expects a credit of about $ 10,000 to catalyze the demand of the EV consumer going forward.