Tesla Motors Inc (TSLA) Is Up Following Jefferies Report

Posted Oct 7, 2013

Jefferies has released a report that says electric vehicles are support.  As a result, Tesla Motors Inc (NASDAQ:TSLA) stock went up today.  As of the time I was writing this, Tesla’s stock is up 1.15% to $183.07.  The company was trading at around $180 earlier today.  Jefferies analyst Elaine Kwei boosted the price target to $210.  Kwei said that Tesla’s vehicles are incredibly safe and that the video of the Model S on fire has not shaken off Tesla customers as much as investors believed.

A Tesla Motors Inc (NASDAQ:TSLA) Model S caught on fire last week.  Tesla CEO Elon Musk said that the fire did not enter the passenger vehicle.  The fire was caused by a curved section that fell off of a semi-trailer.  There was a powerful lever action as it went under the Model S vehicle.  The section impact the Model S with a peak force of around 25 tons.  Based on a force of the magnitude, it was strong enough to punch a 3-inch diameter hole through the quarter inch armor plate that protects the base.

The company’s stock price dropped shortly after the video of the Model S on fire was posted.  There was speculation that this was what caused the stock drop.  Tesla lost 10% of their value in two days of trading and some investors were worried about a bubble.

Kwei wrote the report after she met with Tesla Motors Inc (NASDAQ:TSLA) executives and drove a Model S the first time.  Tesla CEO Elon Musk said that the risk of fire was lower in a Model S compared to traditional gasoline cars.

Musk pointed out that there are 150,000 car fires per year.  Americans drive 3 trillion miles per year, which means that there is 1 vehicle fire for every 20 miles driven, compared to 1 fire in over 100 million miles driven in a Tesla vehicle.

[Source: ValueWalk]