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Why The Slump In Oil Prices Won't Impact Tesla's Sales

Why The Slump In Oil Prices Won't Impact Tesla's Sales
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The slump in crude oil prices over the past six months has made some on the Street skeptical about whether Tesla Motors Inc (NASDAQ: TSLA) would actually be able to sell the number of cars it has forecasted for 2015. However, analysts at Baird feel that the decline in oil price won't materially impact Tesla’s sales.

Ben Kallo, Baird senior research analyst, was on CNBC to explain why Tesla sales are not dependent on oil prices.

"We don’t think that the demand would be impacted by gasoline prices right now. From the last segment, you see here the car average selling price of $90,000 -- we don’t think that consumers are really penciling out gas savings in their purchases. They are more buying the car for its performance, its reliability and for the brand, which Tesla has really become an aspirational vehicle, in our opinion," Kallo said.

Related Link: Tesla Shares Have Hurdles To Clear In Order To Really Start Motoring

When asked if Tesla is in a category of its own, Kallo said, "I think so. I think that because of its technology... the range advance that it has, it is put in a separate category. I think that Tesla has built this cult around its buyers, where it's really become that aspirational vehicle."

"You see reports like consumer reports in most recent rating gave Tesla one of the highest ratings again. So, I think, people are buying for the performance, the luxury and the attributes of electric vehicle."

Shares of Tesla were down 2.4 percent at $218.44.

Posted-In: Baird Ben KalloAnalyst Color CNBC Media Best of Benzinga


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