Tesla’s share price increased by as much as 14% when an analyst of Credit Suisse marked it as neutral instead of an underperforming company.
Credit Suisse, the leading financial services company, said that due to the pandemic, Tesla would make its mark in the market as the company’s performance has been neutral while other companies failed to perform in the market due to the current crisis.
Dan Levy, who works as a senior analyst at Credit Suisse, said that electric vehicles are needed for the hour, and this will provide an extra edge to Tesla, as it will boost their sales. The analyst marked his target price at $580 for the company.
It is easier for Tesla to “GO ELECTRIC”
Levy said that Tesla Motors comparatively has more edge than other automakers because it is only focused on making those kinds of vehicles.
The previous rating given to Tesla was because of the competition it was facing as compared to other companies. But due to emerging coronavirus and the closed markets, Tesla now as an upper edge over other car makers.
Every car company wants to weather the storm
While we’re currently in the coronavirus world, every automaker company is focusing on reducing liquidity and surging net debts. However, the question still stands at how the industry will face the situation in the long term.
Though it is possible for legacy automakers to switch to electric vehicle programs, it isn’t easy to accomplish. That’s because, unlike Tesla, they have the difficulty of balancing a transition to electricity-powered vehicles as traditional car companies.
Tesla is going to be the leader of future car making
Levy argued that though Tesla will do good in the short term, in the long run, it won’t see much of the benefits. Although the transition will make Tesla some money that it so much needs right now, in the long run—when things will be calmer, and the virus will be contained—people will prefer to buy a vehicle that needs liquid to run.
The senior analyst added that no matter what happens, though, Tesla will be the leader of future car making in terms of electrification and software engineering. Why? Because right now, it has the upper hand in terms of batteries. In the crisis-filled world we live in today, Tesla is the only motor manufacturing company that is standing firm and in a better position to weather the storm.