Skip to main content

Market Overview

Adam Jonas On Model 3: 'Most Auto Launches Have Hiccups, Tesla Is No Exception'

Adam Jonas On Model 3: 'Most Auto Launches Have Hiccups, Tesla Is No Exception'

Tesla Inc (NASDAQ: TSLA) bears scored the latest victory in the Tesla saga this week when the company reported just 260 Model 3s produced in the third quarter after previously guiding for 1,500. But while Tesla shares dropped another 2 percent Tuesday and are now down 7.4 percent in the past three months, one quarter’s production number may not be as important as many bears would like it to be.

Morgan Stanley analyst Adam Jonas said Tuesday that, while the Model 3 number is certainly a “hiccup” in the Tesla story, these types of delays are par for the course when it comes to vehicle launches.

Instead of focusing on one bad production month, Jonas says investors should be focusing on the quality and market reception of the Model 3, which is critical for Tesla’s future as a company. Morgan Stanley is projecting 120,000 Model 3 deliveries in 2018.


For now, Jonas said the Q3 number will have no impact on Tesla’s ability to raise the cash it needs to continue building up its infrastructure. But Tesla still has a lot to prove in the long run. Jonas said the company will need to demonstrate that it can generate positive free cash flow, something that Morgan Stanley doesn’t expect to happen until 2019.

At the same time, Jonas said Tesla’s current share price reflects a bit too much optimism.

“TSLA remains a rather expensive call option on disrupting transport and energy, but will (and should) attract serious competition over time — the stock is trading just over our assessment of fair value,” Jonas wrote.

Morgan Stanley maintains an Equal-Weight rating and $317 price target on Tesla.

Related Link: Here It Is: Your Tesla Q3 Deliveries Preview



Image Credit: By Smnt (Own work) [CC BY-SA 4.0 (], via Wikimedia Commons

Latest Ratings for TSLA

Apr 2021Canaccord GenuityMaintainsBuy
Apr 2021Credit SuisseReiteratesNeutral
Apr 2021Goldman SachsMaintainsBuy

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings


Related Articles (TSLA)

View Comments and Join the Discussion!

Posted-In: Analyst Color Price Target Reiteration Travel Top Stories Analyst Ratings Tech General Best of Benzinga

Latest Ratings

ETCredit SuisseMaintains13.0
IFRXCredit SuisseMaintains2.8
METCredit SuisseMaintains68.0
FLXNCredit SuisseMaintains14.0
ENPHCapital OneInitiates Coverage On175.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at