Morgan Stanley Analysts On Tesla: We're Prepared For Potentially Lower Vehicle Deliveries

According to Morgan Stanley’s report, third-quarter results showed increased cash consumption, “testing investor resolve of capital adequacy and raising the stakes for addressing Model X launch issues.”

Nonetheless, the analysts believe Tesla’s longer-term ambitions of advancing the state of sustainable transport have considerable room for market appreciation.

Related Link: Could Tesla Be Larger Than GM? Elon Musk Thinks So

Looking Into 2016

Going into 2016, Morgan Stanley analysts think Tesla shareholders should be prepared for a few “potential fundamental developments” they have modeled and think are critical to comprehending the whole story.

• 1. The firm forecasts cash burn will continue into the fourth quarter and into 2016.
• 2. The experts assured they are prepared for “potentially lower levels of vehicle deliveries” (compared to those targeted by management) in the fourth quarter and in 2016.
• 3. They anticipate a Model 3 to boast an average transaction price of roughly $60,000 per unit.
• 4. They think the company should “eventually more clearly communicate any potential plans for a mobility service (selling miles, not cars) to investors.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.