Tesla Motors Inc (NASDAQ:TSLA) is currently facing a number of headwinds, including delays in product introduction, competition in the market and opposition to its direct vehicle sales concept. However, analysts at Morgan Stanley (NYSE:MS) do not believe that things are as bad for Tesla as they may look. Adam Jonas of Morgan Stanley recently made a surprise declaration that Tesla is the most important auto company in the world.
Tesla Motors Inc (NASDAQ:TSLA) was ranked fourth among the North American automakers in Morgan Stanley’s Global Automotive list. The firm is convinced that Tesla has not lost its luster as a battery-car company. Jonas declared that there was no other important automaker out there than Tesla. Of course, the company’s all-electric cars have gained traction in various markets as governments push to control gasoline pollution. China is a particular market where the government is leading the push to have more electric vehicles on the roads. There are various incentives given for electric car purchases, and Tesla has gained from such credits.
However, Jonas also cited that Tesla Motors Inc (NASDAQ:TSLA) faces a number of headwinds that might impact its performance. Some of the developments that have been cited as potentially harmful to Tesla are slowdown in Model S sales in China and cheap oil.
Slower Chinese sales
Tesla recently conceded that sales of its Model S sedan were slower in China during the last quarter of 2014. Tesla Motors Inc (NASDAQ:TSLA) is slated to release more details about the quarter’s performance later this week. Issues that impacted Chinese sales included concerns about charging availability and the fact that rich Chinese prefer big cars.
Cheap oil favors gasoline car sales
Falling oil prices also favors the sale of gasoline cars, thereby hurting the performance of Tesla Motors Inc (NASDAQ:TSLA). However, this impact is expected to be short-lived as oil prices stabilize and climb. Drillers have been cutting their output and slashing capex to correct oversupply that has impacted prices.
GM complicates matters
General Motors Company (NYSE:GM) that it plans to introduce a mass market targeted battery-car with a starting price of $30,000 and 200-mile range. That means big competition for Tesla Motors Inc (NASDAQ:TSLA), which is also preparing Model 3 as a mass market battery-car that is expected to come in 2018 and start at $35,000. GM could beat Tesla to market with more affordable electric car, thereby destabilizing Tesla’s performance.