Analysts Predict Tesla May Soon Have A Near Monopoly On Market For Electric Cars

 

Financial investment company Berenberg has completed an analysis of Tesla and concluded its stock, currently priced at about $380 per share, could surge another 30% in the next 12 months. In fact, the analyst team, headed by Alexander Haissl, claims the company could soon have a near monopoly in the market for electric cars.

Tesla Model 3 electric cars

Why are Haissl and his confreres so bullish on Tesla? Primarily because, among all the world’s automakers, Tesla is the only one fully committed to pushing the electric car segment forward. All the others are pursuing a “low risk, low investment” strategy that will ultimately leave them ill prepared to compete against Tesla.

In a note to investors this week, Haissl and his team wrote, “With no clear pathway to high-volume EV production for these OEMs before the mid-2020s, Tesla will be given a near-monopolistic opportunity to gain market share and outcompete the incumbent automotive industry.”

Tesla plans to invest almost $33 billion in electric vehicle projects over the next 5 years. That figure dwarfs what Mercedes and Volkswagen plan to spend over the same period. In fact, it is 40% more than those two companies combined¬†and nearly 10 times what Ford’s former CEO Mark Fields said his company would spend before he was fired.





The analysts were also impressed by Tesla’s partnership with Panasonic. “Tesla/Panasonic continue to exhibit a clear advantage on cell and pack technology compared to all peers, on chemistry, cooling and cost. Tesla’s small and actively tube-cooled cells, which are not currently replicated and are unlikely to be so by competitors, drives significantly better residual values and cost-of-ownership advantages.”

Traditional carmakers are taking a timid approach, but, unlike Tesla, they are constrained by the requirement that they make money for their shareholders, whose eyes are on the next dividend check, not what might happen in the next decade. Tesla investors are focused on the rewards they expect to come in 5 to 10 years. That is a critical difference for the upstart automaker from Silicon Valley.

Source: CNBC | Image by Kyle Field





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  • Marc P

    The fundamental question is not who will have control of the EV market, it’s how fast will the EV market get past the fringes of the auto industry.

    Lower prices, better tech, longer range and faster charging times will help the EV market grow. If Tesla can score on all those points, then yes, it will have the lion’s share of the EV market, however small or big it is.

    • Bob_Wallace

      Tesla will probably have a cost advantage for batteries. Tesla will also probably be able to produce the rest of the car for less money due to their new approach to factory design. And Tesla will have a price advantage with suppliers since they will be producing in higher numbers.

      So I’m going to give Tesla the likely number one spot for lowest priced EV. (Someone may make a lower range, less featured EV for less.)

      250 miles range is plenty for almost everyone. And Tesla has a well built out network of Superchargers. No other US/European company has a single charger, fast or slow. Tesla is doubling their number of Superchargers this year. Other car manufacturers are hoping someone builds a rapid charge system their cars can use. Someday.

      If Tesla can sell for about the lowest price and offer a large number of rapid chargers then Mr. and Mrs. Not-fanboys are likely to purchase a Tesla. Why would they spend as much or more for a car they can’t conveniently drive long distances?

      Here’s the other rub. We could see a massive decrease in personal car ownership as soon as cars become self-driving. All Teslas are shipped with all the self-driving hardware and computing power in place. All that’s left is beta testing the software and squashing any bugs. That is expected to take about a year.

      If you’re going to set up a robotaxi company why wouldn’t you look to Tesla first? They’ve got the range, the price, the charger system, and self-driving. Other car companies are a few to several years behind.

      Any company that doesn’t have a long range self-driving EV by 2022 may be a dead duck. It doesn’t take a large drop in business to tip some companies into bankruptcy.

  • Joe Viocoe

    Someone is mistaking the word “leadership” for “monopoly”.

  • mb

    Wish I had some Tesla stock… I mentioned this before but still find it hard to believe Toyota couldn’t bang out one 200 miles range RAV4 EV with a 2016 net income of $19B.

    • Steve Hanley

      Oh, they could have. They just didn’t want to.

      • bioburner

        Yup Toyota was banking on fuel cells not BEVs.

  • WebUserAtLarge

    The Berenberg analysis must be referring to the North American market, and maybe European market to a degree. I don’t think Tesla is or will be in a such a dominant position world wide.

    For example, I am pretty sure Chinese market, the biggest market for cars, in EV context is dominated by the local companies. Even if Tesla is able to rump up production according to Mask’s plans, and I hope they can, it will have to compete in China with the likes of Geely and BYD that already sell in thousands per month. And the EV adoption is government mandated!

    In India, another potential colossal market that targets to have a 100% electric car fleet by 2030, Tesla does not even have a viable competitor to the diminutive Mahindras and Revas that will surely dominate there.

    This is saying nothing of other markets with local EV manufacturing, like S. Korea, Japan and Europe.

    A “near monopoly” in North America? Possibly. World wide? Hmm… I’m not so sure.

    • Bob_Wallace

      I agree. I think we’ll see lower featured EVs coming out of China and being sold into the developing world. And I suspect China will largely buy Chinese.

  • Ed Ralph

    As someone who used to work in the photography industry, I can see at least some of the big automakers going the way of Kodak. That is they know they have to switch to EVs just as Kodak knew well in advance that it had to switch to digital. There is a danger for them like Kodak, that having shown they are technically capable of producing the new technology (I’m thinking of say GM with the Bolt) that they’ll be able to seamlessly transition to it commercially. But as Kodak showed, having made a digital camera or EV that works is a lot different to being able to continue to dominate the market with it.

    • Bob_Wallace

      Kodak basically invented the digital camera. They have a very significant lead over other companies and then made the decision to not continue with digital but to return to film. That has got to be one of the worst corporate decisions ever made.

      GM doesn’t seem to be making the same mistake. GM got out early with the EV1 but batteries weren’t up to the job at the time. It took Tesla’s insight on how to use the ~least cost cells to power EVs to move us across the threshold to really usable EVs.

      But GM is still in the game. Their Bolt seems to be a decent car. They’re not pushing it very much but I suspect they have a different strategy on how they are going to be a major EV manufacturer. Not long ago GM made a very large investment in Lyft and being close to self-driving EVs I think GM sees their future as a robotaxi company with vertical integration from manufacturing through passenger service.

      If we really do move to robotaxis with only a small portion of people owning a personal car I think many car companies will fail. I would guess that most of the smaller companies will disappear. I doubt Chrysler will survive. And I think we may be astonished to see one or more of the big Japanese companies to fail.