Tesla's (TSLA) Delivery Numbers Amid Chip Shortage Proves 'It is Just Different from the Rest' - Morgan Stanley

Morgan Stanley analyst Adam Jonas weighed in on Tesla (NASDAQ: TSLA) after the company reported 241K delivers in September or 9% above the consensus of 222K. Jonas said the big question is "how did Tesla find enough semiconductor supply to beat expectations when the rest of the industry is seeing production schedules get crushed on shortages?"

Jonas said the results "Add this to the long list of evidence that proves Tesla is just different from the rest." He highlighted the following:

• Vertical integration. Tesla is arguably the most vertically integrated OEM in the world, giving it an earlier opportunity to identify and mitigate supply chain distributions. Tesla’s ownership of the retail channel helps eliminate waste and ensures more available vehicles get to their owners without intermediary price hikes.
• Sophistication. Tesla has long designed its own silicon and it applies the latest generation processor technology in its vehicles, creating stronger communication linkages in its supply chain.
• Negotiation. Discussions with suppliers suggest that Tesla’s culture is more ambitious than that of other OEMs while remaining collaborative. Tesla’s ability to further in-source technology keeps suppliers on their toes.
• Scale. Tesla is relatively smaller scale than other legacy OEMs, partially mitigating the scope of supply tightness. At the same time, many suppliers believe Tesla is on its way to becoming a dominant OEM with a multiple of the annual volume that it has today. Despite its modest size, most suppliers consider Tesla a ‘strategic’ customer.

The analyst reiterated an Overweight rating and $900.00 price target on Tesla.

For an analyst ratings summary and ratings history on Tesla click here. For more ratings news on Tesla click here.

Shares of Tesla closed at $775.22 yesterday.

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