Tesla, Inc. TSLA reported Wednesday forecast-beating results for its first quarter. Given the all-around strength and the management’s positive commentary on the mainstay EV operations and other businesses, an analyst at Loup Ventures said Tesla is putting the prospects of companies across multiple sectors at risk.
More Than Car Company: Tesla is more than a car company and more than a tech company, and it is in fact an “energy company” in the hiding, Loup cofounder Gene Munster said in a note.
“In reviewing the details of Tesla’s March quarter, it has become increasingly clear that Tesla has the potential to be even more than an energy company,” the analyst said.
Here are a few companies/sectors Tesla could put at risk:
Automakers: Demand for Tesla is outpacing the broader auto industry, the analyst said. As Tesla scales to meet demand, the price-performance gap versus other automakers will widen, he added.
Traditional autos may have to price their cars 10-25% higher than Tesla, if they manufacture them with all the features contained in Tesla vehicles and choose to sell at cost, the analyst noted. If these companies choose to subsidize their vehicles, their margins will take a hit, he added.
“To that end, we believe that legacy car companies will eventually be forced to restructure or go out of business within the next decade,” the analyst said.
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Ride-hailing Services: Autonomy will eventually be a mandated feature in all cars, the analyst said. Elon Musk’s push to put full-self driving software on roads before it’s ready, though a flawed approach, will hand Tesla a long-term competitive advantage for feeding the self-driving neural network, he added.
If Tesla wins, it could finalize on the ride-sharing service Musk has been sounding out recently, the analyst said. Going by the 2024 timeframe Musk has given for the launch and allowing some leeway for potential delays, the analyst said Lyft, Inc. LYFT and Uber Technologies, Inc. UBER will have about four years left.
Insurers: The Allstate Corporation ALL and GEICO could be in trouble, going by how Tesla has grown its insurance business.
“Traditional auto insurance won’t be able to compete because they will lack the vertically integrated, real-time data that Tesla can share and optimize,” the analyst said.
Physical Labor Musk sounded upbeat about the potential for the Optimus robot, Munster noted.
“If Musk pulls it off, physical labor will be shifted to robots, and the value created for shareholders would skyrocket past the value of EV and autonomy,” the analyst said.
Tesla closed Friday’s session down 0.37% at $1,005.05, according to BenzingaPro data
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