Analyst Forecasts Tesla Sales 40% Below Company's Estimate

Cars and Drivers

Published: December 17, 2014 9:15 am

Last Updated: April 27, 2020 3:56 pm

Saying that low gasoline prices could cause problems for the electric carmaker, Morgan Stanley analyst Adam Jonas forecast sales for Tesla Motors Inc. (NASDAQ: TSLA) at 300,000 units by 2020, 40% below the company’s own estimate of 500,000 units. Jonas expects tumbling gasoline prices to be a factor pressuring sales of the company’s Model 3, which Tesla has said will be priced at around $35,000.

The selling price of the Model 3 could be closer to $60,000 Jonas said in a research note, according to a report at CNNMoney. At that price point, sales of the Model 3 could suffer from competitive gas-powered compacts, especially if gasoline prices remain low.

The Model 3 is not expected to be delivered until 2017, and any estimate of the price of gasoline that far into the future is, at best, a guess. The NYMEX quote on crude oil futures for December 2016 is currently $62.25 a barrel, rising to $64.17 a barrel in December of 2017. Based on Wednesday’s quote for January 2015 delivery of around $54.40 a barrel, the forecast price of crude barely covers inflation. That almost certainly will not be the price of crude three years from now.

Jonas believes that Tesla’s long-term success is “more dependent” on volume sales of the Model 3 than on sales of the existing Model S or the Model X SUV that is scheduled for deliveries starting in the third quarter of 2015.

In November, Jonas cut his estimate of Model X deliveries from a company-reported total of 15,000 to 5,000, but maintained Morgan Stanley’s Buy rating on the stock and a price target of $320. Jonas reiterated the Buy rating Wednesday morning, but cut the price target to $290.

Tesla’s shares were down about 2.5% in premarket trading Wednesday, at $192.91 in a 52-week range of $136.67 to $291.42.

ALSO READ: Low Crude Oil Prices Hammer Tesla

The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%¹ today. Checking accounts are even worse.

But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn a $200 bonus and up to 7X the national average with qualifying deposits. Terms apply. Member, FDIC.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

¹https://www.fdic.gov/national-rates-and-rate-caps