Man, it must be nice to have a cheerleader like Morgan Stanley in your corner. The company is one of the largest financial institutions of this or any other era, and as the underwriter of Tesla’s debt, it has a lot of money riding on the electric automaker’s success. As one of the few tech IPOs to seriously “pop” in the past few years, Morgan Stanley has hitched its trailer to Tesla’s success.
The latest burst of enthusiastic cheerleading from Morgan Stanley analysts predicts a luxury SUV market dominated by the Tesla Model X, reports the LA Times. Analysts predict that it will “sweep every Car of the Year award” from the automotive media just like the Model S did, and strong sales are poised to follow. It could even outsell the Model S sedan by the end of 2016, helping Tesla make the big production jumps it was hoping for. Indeed, Tesla has already taken a bite out of Lexus sales, and the Model X could continue that trend.
This will bring on another jump in share prices, from $250 to $320 or more per share, and could make the Model X a market leader in the luxury SUV space. Wealthy buyers are lining up for the Model X, which already had over 12,000 reservations several months ago. Road testing is slated to begin any day now, though even Morgan Stanley notes that production has been delayed some 6 to 9 months, with launch scheduled for the first half of 2015.
As important as Elon Musk keeps saying the Model III is, the Model X is arguably just as, if not more important, than the mass market $35,000 sedan. The Model S sedan set a high bar for expectations, and with the recent reliability concerns, the automotive press is going to take a closer look at the Model X to see if it lives up to the hype. Falcon-wing doors are cool and all, but can Tesla upstage traditional automakers by building a better luxury SUV that just happens to be electric?
Morgan Stanley thinks so. Do you?