Tesla Motors Inc (NASDAQ:TSLA)’s shares tanked 9% today after a Wall Street analyst raised questions about the growth of the electric carmaker. The analyst, Adam Jonas, issued a report focusing on some primary factors that might hamper the growth of Tesla Motors Inc (NASDAQ:TSLA) in future.
Adam Jonas supported Elon Musk’s, CEO of Tesla Motors, statement that the “share price was a bit ahead of itself.” Elon earlier said, “I think our stock price is kind of high right now. If you care about the long term Tesla, I think the stock is a good price. If you look at the short term, it is less clear.”
Jonas further disclosed his review of the electric car segment and said that these vehicles “failing categorically on a global scale,” and added that electric car requires some innovative breakthroughs to become the mainstream competitors. He further said,
“We are big believers in Tesla’s strategy and stand firmly by our claim that it is the world’s most important car company. But we do not expect the stock to appreciate so consistently and one-directionally from here.”
Further, the report states that the demand for electric vehicles in China could be limited for the next few quarter or even years primarily because of infrastructure limitations and certain local business practices. Further, Morgan Stanley believes that Tesla Motors Inc (NASDAQ:TSLA) would be a niche manufacturer for quite some time.
The shares of Tesla Motors Inc (NASDAQ:TSLA) closed at $255.34 falling 9.08%, although Morgan Stanley maintained its “overweight” rating for the firm but added that company’s shares were quite aggressive in the past few weeks. Morgan Stanley is also concerned about the execution of the $5 billion Gigafactory to be setup by 2017 by Tesla Motors Inc (NASDAQ:TSLA).
This article has been written by Prakash Pandey.