Analyst Colin Rusch Sets Neutral Expectations on Tesla Inc (TSLA) Model 3 and Tonight’s Semi Debut

Oppenheimer's Colin Rusch angles for "intrigue," but recognizes challenges still face TSLA.


After taking the Tesla Inc (NASDAQ:TSLA) Model 3 out for some test drives and visiting CEO Elon Musk’s showroom, Oppenheimer analyst Colin Rusch is out sharing insights on both the mass market electric vehicle as well as the company’s first electric semi truck.

The analyst reiterates a Perform rating on TSLA without listing a price target. (To watch Rusch’s track record, click here)

Rusch highlights, “First, the Model 3 was in line with our expectations for a simple, user friendly design and performance largely in line with a premium vehicle. We expect ASP to be at $50-55K for the foreseeable future. Second, TSLA appears to be actively pushing price adjustments on inventory vehicles that have some mileage on them, ~100-400 miles, with some vehicles as much as ~3,000 miles, with the adjustment on the order of 12-13%. We expect plenty of intrigue around the introduction of its Semi truck product tonight and anticipate the company to aggressively pursue cab light-weighting and innovative aerodynamics to offset battery weight. We believe the charging solution is another critical area of interest.”

Regarding the Model 3 technology, the analyst adds, “We believe the company has pursued low cost, simplified solutions across the board, notably a brushless DC motor, steel/aluminum alloy for chassis, and center tablet which eliminates significant assembly and wiring complication.”

In terms of what investors should expect for the new semi, Rusch boils down challenges facing Tesla to three: range, payload, as well as charging time and convenience. Aerodynamics should “play a large role” here.

Moving forward, the analyst concludes anticipating more delays with the Model 3 ramp to fan apprehensions on rising cash burn and weigh down on shares.

Wall Street is split between the bulls, the bears, and the cautious on the electric car empire, with TipRanks analytics exhibiting TSLA as a Hold. Out of 21 analysts polled by TipRanks in the last 3 months, 5 are bullish on Tesla stock, 8 remain sidelined, while 8 are bearish on the stock. With a return potential of nearly 3%, the stock’s consensus target price stands at $320.27.

 

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