Orlando, FL 12/8/11 (StreetBeat) -- Tesla Motors Inc. (Nasdaq:TSLA) plunged as much as 11 percent after a Morgan Stanley analyst downgraded the stock and cut his price target by 37 percent, saying electric vehicles are “not ready for prime time.”Tesla fell to $30.48 at 10:10 a.m. New York time after touching $30.30. The Palo Alto, California-based company’s shares gained 28 percent this year through yesterday’s close.
Electric vehicles may make up just 4.5 percent of the global car market in 2025, Adam Jonas, a New York-based analyst for Morgan Stanley, wrote today in a research note. His previous estimate for electric-vehicle share was 8.6 percent. Jonas cut Tesla’s rating to “underweight” from “overweight” and reduced his price target for the shares to $44 from $70.
The change in his estimate “is entirely due to lowered forecasts for long-term global EV penetration for the industry, while implying Tesla’s EV market share rises slightly versus our prior forecast,” Jonas wrote.
Elon Musk, Tesla’s chief executive officer, told Bloomberg Television on Oct. 28 that the company is on target to begin delivering Model S sedans next year and should earn a profit in 2013. The premium-electric Model S sedan eventually will retail for as little as $50,000, about half the price of Tesla’s current Roadster sports car.
Tesla’s third-quarter net loss widened to $65.1 million from $34.9 million a year ago, according to a Nov. 2 statement on its website. The company has lost $172.9 million through Sept. 30 this year.
Tesla surged 17 percent on March 31, when Jonas initiated coverage of the company with his previous “overweight” rating.
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