The share price of Tesla 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 will 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.
Den 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 and 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 has comparatively more edge than other automakers because it is easier for Tesla to make electric vehicles than the other legacy automakers as it will not be easy for them to balance the long term shift to Electric 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 right now in the coronavirus world, every automaker company is focusing on the near factor, meaning reduced liquidity and surging net debts, the question still stands that how the industry will face the situation in the long term.
Though it is possible for the automakers for legacy automakers to switch to electric vehicle programs, it isn’t easy for everyone. One should not forget that it is easy for Tesla to focus on making electric vehicles, but it is widely difficult for other automakers to balance the transition.
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 calm, and the virus will be contained, people will prefer to buy a vehicle that needs liquid to run.
He said that no matter what happens, Tesla will be the leader of future car making in terms of electrification and software engineering as right now, it has the upper hand in terms of batteries. Tesla is the only motor manufacturing company that is standing firm and in a better position to weather the crisis.