Tesla Investor Ross Gerber on Model Y, Battery Tech, Nikola, and More
Tesla’s meteoric rise past $1,000 a share sparked downgrades from Goldman Sachs and Morgan Stanley, but investors focused on the long-term story of Tesla should not get distracted by near-term commentary about valuation, according to notable Tesla investor Ross Gerber.
Supply & Demand: Goldman Sachs and Morgan Stanley cited concerns over production challenges with the Model Y, recent price cuts, and trade tensions between the U.S. and China. Model Y production is a top priority for Tesla, but the Y is experiencing supply chain ramp obstacles. Gerber, the President and CEO of Gerber Kawasaki, dismissed concerns about production, stressing that Elon Musk has already proven he can overcome such challenges.
“I actually am more concerned with demand than supply. I think ultimately supply will be fine, but the question is what’s demand?” Gerber said in an interview with Voices of Wall Street.
Price cuts: Tesla is slashing prices of the Model 3, Model S, and Model X in North America. The cost of the Model 3 will be trimmed by $2,000 across all versions, while the Model S and X will be reduced by $5,000. The changes could indicate weaker demand as consumers grapple with the economic fallout from COVID-19.
Tesla Semi vs. Nikola: Elon Musk told his staff it was time to bring the Tesla Semi truck to “volume production.” This comes as newcomer Nikola gains hype for its concept of hydrogen fuel cell-powered semis. Gerber told Voices of Wall Street he believes there is room for other players in the EV semi space, but does not think Nikola is one of them.
“The thing that troubled me is when I read things about the technology that they're using, and I talked with Elon about this, and other experts, and the hydrogen system just does not make any sense,” Gerber said. “I think that the issue with Nikola is they’re building on a technology that will never be adopted, it just never will happen, so they’re done.”
Million-mile battery: Chinese EV battery supplier CATL, which is a supplier for Tesla, is developing a power pack that lasts more than a million miles. This innovation would reportedly allow the battery to be used in a second vehicle, effectively lowering the cost of owning an electric vehicle.
Sustainability: While the battery has the potential to improve the experience of owning an EV, it also is a critical piece of Tesla’s mission to combat climate change.
“With these innovations over the next decade, climate change is a solvable problem,” Gerber said. “That’s the challenge that Tesla will face in the next decade, implementation and fighting the same evil forces that will prefer to burn our Earth for profit than accept a new system around electricity.”
