Trip Chowdhry Comments on Today's Weakness in Tesla (TSLA)

Chatter on trading desks is that Tesla (NASDAQ: TSLA) is down because of new battery competition from VW. However, Global Equities Research analyst Trip Chowdhry has a different take. He said Tesla has probably delayed the deliveries of P85D by a week, as TSLA was waiting for the new P85D stickers that had the new EPA driving range estimates.

Below is a summary of Chowdhry latest views:

• TSLA has probably delayed the deliveries of P85D by a week, as TSLA was waiting for the new P85D stickers that had the new EPA driving range estimates
• Production of P85D continues ...however, the completed cars are still on the factory lot
• First deliveries of P85D were expected on this Wednesday, but will now occur sometime next week, after the new stickers are pasted on the P85D Cars
• We have attached the image of the new P85D sticker below - Please note the following:
  • The EPA range of P85D is estimated to be 242 miles and not 285 miles that TSLA claimed at the launch
  • This discrepancy may be because of the following:
    • EPA changed its rules in 2013...before 2013, the range of the car was calculated using 100% fully charged battery
    • However, after 2013, EPA calculated the range by taking the average of 100% fully charged battery and 80% charged battery. i.e. the range is calculated using an average of 90% charged battery - and also depending on the mode of P85D driving - Comfort, Sport and Insane (Insane mode gets 0 - 60 in 3.2 sec), the range varies
    • Using Apples to Apples comparison, i.e. using the pre 2013 EPA testing method of 100% charged battery figures, the P85D range of 242 miles would have actually been 266 miles, better than its RWD version, which gives an estimated ranged of 265 miles
    • P85D continues to be the most efficient 4WD in the market, where the range is equal if not better than its RWD version
• The demand and interest for P85D continues to remain strong....customers are eager to get their P85D ..."Put the sticker on the car, and deliver my P85D now" is the comprehensive view we got
• Mid to long term fundamentals of TSLA remain intact

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