Barclays Breaks Down Their Deep Dive on German OEMs into 5 Tweets, Sees Tesla (TSLA) as 'Deeply Overvalued', 'Structural Short'

April 18, 2018 7:30 AM EDT
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Analyst Brian Johnson issued a 89-page report late Tuesday on German OEM approach to manufacturing EVs.

The following are five summaries from the bank, done in the spirit of Twitter's 140 character limit, that explain Johnson's view and he suspects dialing back robots won't be too helpful for GMs at Tesla (NASDAQ: TSLA), which is why he believes TSLA is "deeply overvalued" and a "structural short":

  1. Hey @elonmusk: German OEMs & other dinos you have mocked will be rolling out exciting new BEVs -- 6 new models in ’18, & 13 in’ 19.
  2. Production hell, nein; Industrie 4.0, ja: German mfg is state of the art now & gets better w/ a harmonious blend of humans + robots, AI, IoT.
  3. TSLA went a robot too far? Despite the quest for an “Alien Dreadnought” @elonmusk admitted that automation needs to be dialed back, is that good for gross margins?
  4. Showdown on scale: German OEMs will leverage scale economies either thru large native EV platforms (VW) or modular approaches (BMW).
  5. With solid & profitable EVs coming while TSLA struggles, legacy OEMs deserve rerating – BMW (European OW, Top Pick) and GM (OW in US Autos).

Johnson says BMW is a Top Pick while reiterating his negative view on TSLA which he has listed at Underweight with a $210.00 price target.



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