In this note they are reiterating their concern about the Tesla order book (based on delivery estimates now 1 month after ordering), and explain why this concern is not reflected in the current stock price, with four theories:
1. Income from ZEV credits (JP referred to this in his recent post on Seeking Alpha)
2. Model S prospects in China
3. Tesla is in a strong position to raise additional capital
4. Model S is just a damn good car
I particularly liked the last one, and the comment about a group of BMW engineers who did not think Tesla would be able to pull it off:
- - - Updated - - -Lost in a sea of blogs, trades and tweets is one truth: The Model S is a damn good car. Each day that goes by where Tesla delivers 60 units without images of flaming Model S’s on YouTube offers incremental validation for what it has accomplished. At a recent presentation, we asked a room full of 30 BMW engineers if any of them thought Tesla would make it this far. Not one hand went up. These guys just won't go away.
Regarding the ZEV credits and JP's negative take on it, this is discussed at length in the Nonsense-from-John-Petersen thread starting here.
Morgan Stanley has a more interesting take on it:
ZEV credit CARBitrage. Tesla made $40.5m in selling ZEV and GHG credits to other OEMs in 2012, or $13.9k per completed vehicle. The negotiated value of the credits is function of penalty avoidance ($5k), reputational protection and development cost risk management by non-complying OEMs and the supply of ZEVs from competing EVs. A similar ‘Rev per ZEV’ could add $250m to Tesla profit in 2013. Unlikely, but what if? CARB's rules and failing EV competition funnel an unusual concentration of economic benefit to Tesla.