Tesla's X factor
If Tesla manages to roll out the Model X on schedule without delays, then decent sales of the electric SUV for the remainder of 2015 could lead the company’s shares to hit all-time highs, according to a research note from Morgan Stanley. Tesla has already reported strong interest in the vehicle, with 20,000 pre-orders in the bag.
There are concerns about Tesla’s energetic R&D spend, though – the company plans $1.5 billion in capital expenditure this year to retool and build out its plants, boost battery development, and expand its supercharger network. But, as Morgan Stanley asks, ‘who would you rather give $1.5 billion to invest – [Tesla CEO] Elon Musk. or your average auto company?’.
The investment bank concedes that R&D spend as a percentage of sales is at a ‘staggeringly high’ level, but thinks this is justified in Tesla’s case as the company is forefront of innovation in its sector, while it is also strong influencer on the automotive sector globally.