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Tesla Springs No Surprises With Secret Master Plan Part 2; UBS Maintains Sell

Following the unveiling of Tesla Motors Inc TSLA 3.64%'s long-term strategy, UBS maintained its Sell rating and $160 price target. The firm feels the new plan, which the company dubbed as Secret Master Plan Part 2, is unlikely to surprise investors, given the inflated expectations around its future.

While noting the plan included solar/storage, mass/commercial transport, fully autonomous tech and car sharing, UBS auto analyst Colin Langan clarified that the integrated solar-storage was in the pipeline ever since the SolarCity Corp SCTY 2.19% deal. The analyst sees no rationale in the merger and instead would have preferred Tesla striking a joint venture. Even after the deal, the plan didn't shed much light on the solar/storage combination.

Tesla announced that a new compact SUV and a new kind of pickup are on the anvil. The company's plans of bringing out an eventual heavy duty truck came as a surprise to the UBS. With the company tight-lipped about the timeline, UBS is concerned if the company can manage with elan multiple vehicles belonging to varying platforms, given the issues it is facing with only two models.

Langan said, "Tesla's focus on self-driving (10x safer than human) and shared cars is not surprising or unique to Tesla." This, the analyst premised on General Motors buying Cruise Automation and investing in Lyft.

Although Tesla suggested a five-to-10 fold increase in version 3 in two years, UBS noted the company didn't clarify how Tesla will differentiate it from traditional OEMs. Thus, UBS justified its price target for Tesla on its three-stage discounted cash flow analysis.

Jul 2016Credit SuisseDowngradesOutperformNeutral
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