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Tesla surges nearly 10% on Monday after Credit Suisse upgrade


A Tesla mobile service vehicle outside a dealership in Vallejo, California, U.S., on Tuesday, October 19, 2021.

David Paul Morris | Bloomberg | beautiful pictures

Shares of the electric vehicle manufacturer Tesla up nearly 10% on Monday after Credit Suisse upgraded the stock to “outperform” and the broader market recovered.

Tesla had previously dropped nearly 20% in January as the sell-off dragged the Nasdaq down.

Stocks are particularly under pressure after CEO Elon Musk spoke about the company most recently earnings call That’s Tesla will not deliver any new models to customers in 2022including the Cyberbtruck, an experimental pickup.

Instead, Musk informed shareholders that Tesla plans to focus on scaling production at its old and new factories, while devoting resources to develop a humanoid robot and driverless vehicle technology. Musk has been promising to make driverless vehicles a reality since 2016, and has yet to offer a safe “robotaxi” for drivers to use hands-free.

Credit Suisse saw a buying opportunity and set a $1,025 price target on Tesla stock right now.

Analyst Dan Levy wrote in a note on Monday, “Tesla surprised with increased profits, largely due to cost reductions; we believe high margins are sustainable.” And he said, “We believe legacy OEMs are taking clear steps to transition into the EV world, but we expect Tesla to maintain its lead for the foreseeable future.”

The note also says, “So far, Tesla’s profitability has been largely a semi-autonomous hardware function, with some modest software benefits… specifically FSD (Self-Driving Features) completely). However, as Tesla releases more FSD features and unlocks more deferred revenue (potentially flowing through with a 100% contribution margin), Tesla will see increased margin returns increase. “

This weekend, Musk said on Twitter, “Tesla will support FSD licensing by other manufacturers,” but did not say when or if any automakers have expressed interest.

Other electric vehicle manufacturers also recovered on Monday, with Rivian increased by more than 12% and Lucid about 7% increase. Legacy automakers with important plans for battery electric vehicle production, Ford and GMalso saw each stock rise more than 3% midday Monday.

According to analysis by the International Energy Agency, there were about 6.7 million battery electric vehicles (BEVs) around the world at the end of 2020, including 1.1 million in the US that year.

Last August, President Biden said he wanted half of all cars sold in the US to be electric by 2030, including hybrids and battery electric vehicles.



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