Tesla could shed more than 40% if it's overtaken as the leader in electronic vehicles, Credit Suisse says

ReutersA Tesla Model 3 car is displayed during a media preview at the Auto China 2018 motor show in Beijing

  • Tesla’s position as the top electric-vehicle maker in the US could slip and send shares down more than 40%, according to a Thursday note from Credit Suisse.
  • On Sunday, Ford is expected to announce the Mach-E, its Mustang-inspired electric SUV, the company announced Thursday.
  • This could pose a threat to Tesla, according to Dan Levy of Credit Suisse, as it “marks an increased effort by the legacy US automakers to be relevant in electrification.”
  • Watch Tesla trade live on Markets Insider.

Tesla might be running out of time to capitalise on its position as the leading electric-vehicle carmaker, according to a Thursday note from Credit Suisse.

“Tesla has a window of opportunity now with a clear competitive lead,” wrote Dan Levy of Credit Suisse. “Yet to the extent Tesla continues to struggle with the basic ‘blocking and tackling’ of the auto business (i.e., manufacturing, delivery logistics, service), it risks not capitalising on this opportunity.”

Levy has an underperform rating on shares of Tesla and a price target of $US200. That’s 42% below Tesla’s Wednesday close of $US346.11 per share. He thinks that as electric vehicles become more prevalent, a “true competitive threat” to Tesla will emerge.

That could be sooner than later. Ford is expected to announce its Mustang-inspired electric SUV, called the Mach-E, on Sunday, November 17, the company announced Thursday.

The car “should provide a more compelling alternative at the Model 3 price range than the other comps, especially given the performance focus,” Levy wrote. Ford’s Mach-E is expected to price in the “mass luxury” range, starting between $US40,000 and $US50,000, and have a 300 mile range, according to the note.

If sales of Ford’s new Mach-E are successful, it could erode some of Tesla’s hold on nearly 80% of the US electric-vehicle market share, according to the report.

“The launch marks the first real milestone in Ford’s increased emphasis in electrification, and more importantly marks an increased effort by the legacy US automakers to be relevant in electrification,” Levy wrote.

Shares of Tesla were up roughly 1.24% at 1:30 pm in New York City. Tesla has a consensus price target of $US273.38 and 11 “buy” ratings, nine “hold” ratings, and 16 “sell” ratings, according to Bloomberg data.

Tesla shares are up 5% year to date.

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