Tesla CEO Elon Musk gets into a Tesla car as he leaves a hotel in Beijing, China, May 31, 2023.
Tingshu Wang | Reuters
Tesla shares closed down about 5% at $209.98 on Thursday after HSBC Global initiated coverage with a “reduce” rating and a $146 price target. In their note, HSBC analysts called Elon Musk both an asset and a risk to Tesla, noting that he is a “charismatic CEO with a cult-like following” who “feeds into the innovators’ narrative.”
The analysts also noted that “hope” is already embedded in Tesla’s stock price about the company’s many ambitious future technology projects, from its long-delayed driverless systems to humanoid robots and supercomputers. “The ideas will probably have to become reality to support the current share price,” the analysts said.
“Tesla is more than a very expensive car company,” the analysts wrote at the start of the note. “His goal is to be an innovator, which underpins the valuation.”
On the pessimistic side, analysts at HSBC wrote: “Significant delays or developments that indicate a lack of technological and/or regulatory feasibility for a commercial launch of these projects pose significant risk to Tesla.”
On the more optimistic side, HSBC analysts said Tesla’s core automotive business “faces fewer challenges than incumbents and therefore deserves a premium.” They said: “Electric vehicles are a growth market due to increasing market penetration and are likely to remain so for decades to come. Tesla is already a cost leader and is likely to remain so given its stated ambitions (and scale).”
They also expressed optimism for Tesla, saying “faster-than-expected development” in these areas “could lead to a reassessment of Tesla multiples,” as well as “higher-than-expected market share gains due to the price reductions we expect.” ” in Tesla’s core business with electric vehicles.
In addition to HSBC’s “Reduce” rating, Tesla is also facing a widening strike in Sweden.
Swedish unions are pressuring Tesla with strikes and blockades because the company has so far refused to sign a collective agreement with employees in its service department, including technicians and mechanics who repair and maintain customers’ cars.
The IF Metall union, which represents some Tesla service workers, launched strike action at 12 Tesla service centers on October 27, the New York Times reported. Port workers who are members of the Swedish Transport Workers Union have said they will not unload Teslas at ports in the region if the electric vehicle maker cannot negotiate a labor contract by November 17. Electrical workers who, among other things, maintain the company’s charging stations have also promised to strike from November 17 if an agreement is not reached.
According to reports from The New Republic, the industrial action could potentially spread to Norway.
Meanwhile, President Joe Biden spoke to UAW workers in Illinois on Thursday, where he expressed support for the union leader’s ambitions to reach collective bargaining agreements with Tesla, Toyota and others.
UAW President Shawn Fain said during an online broadcast in October, “When we return to the bargaining table in 2028, we will be negotiating not just with the ‘Big Three,’ but with the Big Five or Big Six.”
Tesla is expected to host a Cybertruck event later this month. While specs and pricing for the final version of the Cybertruck have not yet been announced, Tesla has allowed some Cybertrucks to be taken to promotional events. Car critics, including hobbyists and professionals, reviewed their build quality and design this week, The Autopian reported.
Source : www.cnbc.com