$TSLA, $DDAIF, $GS
Heavy pressure is bearing down on Elon Musk and Tesla (NASDAQ:TSLA). CEO Musk is shouldering a production Hell, cash crunch, the ‘420’ Twitter-induced drama, and now competition from 1 of the most powerful manufactures in the automotive sector is bring to market its luxury EV SUV.
Mercedes-Benz (OTCMKT:DDAIF) Tuesday unveiled the EQC, its 1st entry into the all-electric luxury vehicle market. It joins Jaguar’s new I-Pace all-electric SUV, due in US showrooms this Fall. Audi and Porsche will begin selling luxury all-electrics in Y 2019.
This world class competition is a Key reason Goldman Sachs (NYSE:GS) stock analyst David Tamberrino downgraded Tesla’s stock Tuesday morning, and another is the pending end of US tax credits on its EV.
In a note to investors, Tamberrino put a “sell” rating on Tesla stock with a target price of 210/share
That plan was aborted by Tesla CEO Musk after he told the board of directors he had changed his mind.
Recall that on 7 August Mr. Musk while driving in his car to the airport Tweeted that he had “funding secured” for a deal at 420/share.
Neither Mr. Musk nor Tesla has produced any evidence that funding was secured for the ‘420’ deal, and the Securities and Exchange Commission (SEC) is reportedly investigating Mr. Musk’s dubious claim.
Mr. Tamberrino focused on the looming end of federal tax subsidies for buyers of Tesla vehicles, along with increasing competition.
“Tesla is losing the US tax credit ahead of competition, posing further challenges to affordability at a time when competition is intensifying,” he said.
Tesla has benefited from a $7,500 customer tax credit on its MS, MX and M3 cars, which range in price from $50,000 to well over $100,000, depending on options. The tax-credit program begins to run out after a manufacturer sells 200,000 cars in the United States, which Tesla has surpassed. The credit amount will drop to $3,750 in January 2019 and to $1,875 in July, then will disappear in January 2020.
The Mercedes-Benz EQC, shown in Stockholm, is due to hit US showrooms in Y 2020 and would qualify for the full $7,500 credit if the program remains intact.
The car is the 1st in a line of all-electric Mercedes passenger vehicles. Chief Executive Dieter Zetsche said the company is investing about $12-B on an expanding EQ line.
If that were not enough, 2 more Tesla competitors will be unveiled soon, both in San Francisco. On 11 September, BMW will reveal the iNext, which aims to take on Tesla’s M3. BMW also plans to export an all-electric SUV from China, the iX3, under a joint venture with China’s Brilliance Auto.
Porsche has already announced its all-electric sports car, the Taycan, which will be available in the United States sometime next year.
More lower-priced vehicles are expected soon, including a higher-range version of the Nissan Leaf and an all-electric version of the Hyundai Kona compact SUV, expected to go on sale this fall.
Dozens of other EV models are in the works.
Tesla’s future is not bright.
|NASDAQ:TSLA||288.95||4 September 2018||-12.71||296.94||298.19||288||8,299,100|
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Neutral (-0.22)||Neutral (-0.06)||Bearish (-0.38)||Neutral (-0.22)|