Tesla Motors Inc (TSLA): Wedbush Upgrades TSLA To PT Of $240

Posted Oct 15, 2013

Tesla Motors Inc (NASDAQ:TSLA) has received an upgrade to OUTPERFORM from NEUTRAL due to a proprietary survey that supports higher Gen III expectations than Wedbush Securities’ prior forecast.  The survey strongly indicates that consumers are receptive to purchasing electric vehicles.  Wedbush’s 12-month price target for Tesla Motors Inc (NASDAQ:TSLA) is now $240 (from $180).

The survey data was supportive for Gen III mass market potential in the $35k-$45k price range.  Out of 892 respondents, over 20% indicated they would absolutely consider driving an EV (vs. 65% maybes).  Around 19% were willing to pay $5,000 or a greater premium for a 90% improvement in fuel economy.

“We see these buyers as credible since 72% of the two groups overlapped and 64% scored in the top two tiers of our technology adopter quotient,” said Wedbush in their report.  “We screened survey respondents to include only those that indicated they own or lease either a car, truck, or van and are likely to purchase or lease a new vehicle in the next year.”

Wedbush also said that the Model S momentum remains impressive.  Based on self-reported Tesla Forum VINs, as many as 7,000 units have likely been produced in Q3 2013 so they raised the 2013 and 2014 delivery forecast to reflect this activity.

Wedbush raised 2017 forecasting estimates at 150,000 Gen III units, which reflects updated unit expectations 50% above their prior forecast.  Following the survey, Wedbush now believes in the longer term that the Gen III car could be a 300k-500k unit product.