Tesla: Morgan Stanley – Stock Could Double

Forget about a mere 15 percent increase in stock value — how about a 90 percent one? That’s how bullish Morgan Stanley analyst Adam Jonas is on Tesla.

In a note this morning, Jonas has increased the price target for Tesla to $465 from $280. (The stock opened at $243 on Monday morning before rising about 4 percent in early trading). The key reason behind this is what he calls “Tesla Mobility, an app-based, on-demand mobility service.” The race for autonomous driving is nothing new, with tech giants such as Apple and Google also making a push in this realm, but the report says Tesla is well positioned to get large market share. Jonas is telling clients that “Tesla is uniquely positioned, in our view, to solve the biggest flaw in the auto industry, <4% utilization, via an app-based, on-demand mobility service.”

Here’s more:

Given the pace of technological development both within Tesla and at rival technology and mobility companies, we would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months… We view this business opportunity as potentially additive to Tesla’s existing model of selling human-driven cars to private owners and see potential for this model to conceivably more than triple the company’s potential revenues by 2029. That is, selling miles in addition to selling cars… If Tesla wants to make good on its mission to accelerate the world’s transition to sustainable transport, we see the move to a shared mobility model as critical…

Here’s a look at how this new mobility segment plays into the price target. It adds $244 a share in the bull case scenario, the second largest contributor behind the traditional Tesla Motors.

The report goes on to say that Tesla has five critical attributes a company needs in order to be a successful shared mobility firm, which are:

In terms of a timeline for Tesla Mobility, Jonas says there will be three stages. The first version will be a semi-autonomous car, where there is still a human driver. This would take place in the years of 2018-2021. The second stage is a car that is closer to being fully autonomous, but would still need what they call an “operator.” This essentially means that there is no need for human intervention in as much as 99 percent of various situations. Jonas expects this to encompass the years of 2021-2025. The final stage is a phase-in of fully autonomous and shared vehicles, expected to begin 10 years from now.

Jonas points out that Tesla has remained fairly quiet about ride sharing, although he did ask Elon Musk about this on the company’s second quarter conference call.

Here’s the transcript:

Jonas: First question: Steve Jurvetson was recently quoted saying that Uber CEO Travis Kalanick told him that if by 2020 Tesla’s cars are autonomous, that he’d want to buy all of them. Is this a real, I mean, forget the 2020 for a moment, but is this a real business opportunity for Tesla? Supplying cars to ridesharing firms, or does Tesla just cut out the middleman and sell on-demand, electric mobility services directly from the company on its own platform?

Musk: That’s an insightful question.

Jonas: You don’t have to answer it.

Musk: I don’t think I should answer it.

Jonas: Sometimes you can tell more from the non-answer than from the answer.

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TESLA Announcement on April 30 – Home Battery ?

Elon Musk May Have Scooped Tesla’s Big Announcement
It’s a big deal, but shouldn’t come as a surprise.
Don’t Miss Ou

Elon Musk is about to announce a new product that’s not a car. He said so in a mysterious Tweet designed to induce the highest level of nail-biting suspense. But the Elon Musk of two months ago may have told us exactly what we should expect.
“We are going to unveil the Tesla home battery, the consumer battery that would be for use in people’s houses or businesses fairly soon,” Musk said during an earnings conference call in February. He said the product unveiling would occur within the next month or two.
Here’s his teaser from today, which drove up shares of Tesla 3.5 percent:

Tesla is building the world’s biggest battery factory in Nevada — a $5 billion project that Musk says will reduce the price of battery storage by 30 percent. Combining solar panels with backup capacity could allow homeowners to avoid buying electricity from utilities. If the prices come down enough, it could both enhance and disrupt the U.S. power grid.
Last year, Musk said his home-storage battery will be “cool”—a word not often applied to hunks of hardware kept in basements. Here’s how he described it in a conference call in May:
“The sort of thing we have in mind is something that looks a bit like the battery pack in the Model S… something really flat… coming just five inches off the wall, a beautiful cover, integrated bidirectional inverter, and it’s just plug and play.”
Jargon alert: “integrated bidirectional inverter” basically means electricity can flow where you want it to, and “plug-and-play” means it’s easy to set up.
If indeed Tesla launches a battery, it will be a big deal. It just shouldn’t be that much of a surprise.
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Will Tesla Ever Make Money?

Tesla Manufacturing Plant

Elon Musk makes great cars, but investors are wondering when his company will turn a profit.
(Bloomberg) — Chris Ziegler presses the pedal of his Tesla Model S. It surges forward silently and instantly — unlike gas-powered cars that roar and gulp for air before accelerating. Driving in the hills north of Los Angeles, he whips through hairpin turns without worrying about flipping over. Thirteen hundred pounds of batteries under the floorboard make that nearly impossible.
Ziegler loves everything about his all-electric, $107,000 Tesla, including that he recharges its batteries using solar panels in the trees above his house. That lessens his contribution to climate change and his dependence on oil from the Persian Gulf — which Ziegler patrolled as a Navy gunnery operator in 1983.
“I’m stunned major automakers haven’t fired back with a product to compete with Tesla,” says Ziegler, 49, a real estate project manager in the L.A. suburb of Monrovia. The license plate on his Model S reads “Waat Gas,” Bloomberg Markets magazine will report in its April issue.
Ziegler is so convinced the Tesla is the car of the future that he and his wife, Barbara, a sales executive for an institutional investment firm, sank 90 percent of their liquid assets in its shares beginning in 2010, when the stock sold for $16. Barbara also earned hundreds of thousands of dollars trading options against investors who thought Tesla would fail, she says.
Tesla, of course, hasn’t failed. Rather, Chief Executive Officer Elon Musk says it’s leading the world into a future without gasoline. Already going toe-to-toe with competitors such as BMW and Mercedes-Benz, he wants to take Tesla cars to the mass market — and push forward the process of freeing the world from its dependence on fossil fuels.
Skeptics Abound
Eventually, “all cars will go electric,” Musk said at a press conference in January
Yet there are plenty of skeptics who question whether Tesla will ever be capable of competing with the Toyotas and General Motors of the world — or get out of the red any time soon. Since its founding in 2003, the company, which went public in 2010, has earned a profit in just one three-month period. In 2014, it lost $294 million on $3.2 billion in revenue.
Some $217 million of that revenue came from the sale to its competitors of zero-emission-vehicle, or ZEV, credits and other pollution allowances.
“You’re talking about a company with no cash flow,” says Matthew Stover, an analyst at Boston-based Susquehanna Financial Group, which in the three months ended on Jan. 31 sold more than half its 1.5 million Tesla shares. “One hundred percent of the value of the shares is associated with some view of the future that has not manifested itself in the past.”
2020 Profits
In a Feb. 11 conference call with investors after releasing Tesla’s fourth-quarter financial statements, Musk, 43, predicted the company would have positive cash flow by the third quarter of this year. He has also forecast that Tesla will be making a full-year profit under generally accepted accounting principles by 2020.
Stover isn’t the only investor skeptical of Tesla’s prospects — and of its stock price, which at $199.6 on March 3 valued the company at $25.1 billion. (That’s almost 40 percent of the market capitalization of Ford, which last year sold 6.3 million vehicles, almost 200 times as many as Tesla.)
As of Feb. 13, 26.8 percent of Tesla’s shares had been sold short, with more investors betting on their decline than for any other company in the Bloomberg Intelligence Global Automobiles Valuation Peers Index.
Musk’s Confidence
The naysayers haven’t dented Musk’s confidence. On the Feb. 11 conference call he said that in 10 years Tesla could match the market cap of Apple, which on March 3 was the world’s most valuable company, worth $753 billion. In a February letter to shareholders, he wrote that vehicle deliveries would increase by 70 percent this year and that there would be a “significant” increase in what he called non-GAAP income, a calculation that takes into account factors such as lease payments and deferred stock options.
Tesla — named for Nikola Tesla, who designed alternating-current power systems in the 19th century — offers buyers just one product, the Model S, of which it sold 31,655 in 2014 at a price that started at $71,000. The company will introduce a gull-wing SUV late this year, also priced at around $70,000, and then target middle-income consumers with a $35,000, 200-mile-range (320-kilometer) car called the Model 3 in 2017.
Musk forecasts he’ll make 500,000 vehicles by 2020 at his Fremont, California, factory, equipping them with batteries from a massive plant dubbed the Gigafactory that he’s building with Panasonic in the Nevada desert.
Innovation Leader
Even supporters question whether Musk can meet his targets. Morgan Stanley auto analyst Adam Jonas is a Tesla enthusiast yet predicts the average Model 3 will cost $60,000 and that Tesla will sell 319,000 cars a year by 2020. He thinks that even at the lower number Tesla can make money and lead innovation in the global auto industry.
Jonas has an overweight rating on the shares.
Susquehanna’s Stover says that the Tesla share price — it peaked at $291 in September before falling in tandem with oil prices — suggests investors already regard the Model 3 as a hit.
“Since nothing can happen for two years to validate that view, the market will simply be guessing,” Stover says.
Tesla’s debt is no less popular than its shares. In February 2014, investors bought $2.3 billion of Tesla convertible notes with coupons of 1.25 percent or less — a smaller return than U.S. inflation. The bonds won’t convert to shares — and provide a bigger return to investors — unless the stock reaches $359.87.
Model X
If the past is prologue, the Model 3 will be late; it’s already about two years past its original launch date, as is the SUV, dubbed Model X. And analysts say there is no guarantee that Musk’s battery factory — which he predicts will dramatically reduce the cost of the Tesla’s most crucial component — will live up to expectations. The plant will supply batteries for two businesses that are in their infancy: electric vehicles and solar power systems being built by another company he founded, SolarCity.
Tesla doubters point out that once the Model 3 comes to market, it will face a tsunami of competition. Virtually every major carmaker is producing or is on the verge of producing a ZEV, in part to meet rising emission standards of the federal government and the state of California.
No one doubts that, in the Model S, which Tesla introduced in 2012, Musk has created a vehicle that’s hard to hate. The appeal is based on its ferocious performance and 265-mile driving range — the highest among electric cars. In October, Tesla launched a dual-motor version that goes from zero to 60 miles per hour in 3.2 seconds, half a second faster than a gasoline-powered Corvette.
Dashboard Touchscreen
The Model S also has cozier features, like a 17-inch (43-centimeter) dashboard touchscreen. Drivers control nearly every function by swiping their fingers — just like on their iPhones. (It’s no coincidence that several high-level Tesla employees were hired away from Apple, which is also researching automotive technology.)
The communication system enables Tesla owners to regularly download new capabilities, like a navigation system introduced in September that plans alternate routes based on traffic.
Among U.S. buyers, 96 percent say they love their Tesla’s technology, according to a December survey by marketing consultant Strategic Vision, compared with 62 percent for Porsche and 55 percent for BMW.
Entrepreneur Musk
Wall Street’s love affair with Tesla is really a romance with the charismatic Musk, a South African–born entrepreneur who pronounces his company’s name TEZ-la. He earned bachelor’s degrees in economics and physics at the University of Pennsylvania and then dropped out of the Stanford University Ph.D. program in physics to join the Internet boom.
Musk helped create PayPal in the 1990s and pocketed $165 million when EBay bought the company in 2002. By the time he joined Tesla in 2004, he had already launched rocket manufacturer Space Exploration Technologies, or SpaceX.
A decade later, he’s got a near-mythic reputation.
“Elon Musk is our generation’s Thomas Edison,” says Joseph Fath, a fund manager at Baltimore-based T. Rowe Price Group.
“He’s the greatest inventor of all time,” says Gwynne Shotwell, chief operating officer of SpaceX.
“Elon will be the richest man who ever lived,” says Scott Painter, CEO of TrueCar, a Santa Monica, California–based online auto-buying service.
Disruptive Technology
T. Rowe Price started buying Tesla at $20, and the firm now owns 6 million shares scattered in half a dozen funds. Fath, who runs the Growth Stock Fund, says the shares will do OK even if the Model 3 is only a moderate success and could double if the car is a hit.
“You don’t often see large-cap stocks with this kind of significant disruptive potential,” he says.
Max Warburton, a Sanford C. Bernstein & Co. analyst in Singapore, says Tesla’s shares are priced less on the company’s own financials and more on how it’s forcing competitors to boost spending on electric cars.
“Tesla is massively disruptive,” Warburton says. “Its valuation reflects the $30 billion problem it’s created for the rest of the car industry” — a reference to the amount he says other automakers will spend chasing Tesla.
Reusable Rockets
Musk is even disrupting outer space. SpaceX has promised NASA, with which it has $4.2 billion in contracts, and satellite makers that the reusable rockets he’s developing can deliver their payloads at a much lower cost than other companies.
In person, Musk is relaxed and soft-spoken, with blue-green eyes that dart around the room as he talks. He works long days at his various California offices — Tesla’s headquarters is in Palo Alto; SpaceX’s in a Los Angeles suburb — and spends as much time as possible with his five sons in L.A. He’s twice divorced.
In speeches and interviews, Musk shows little immediate concern for investors who’ve watched shares of alternative energy and related companies plunge with the price of oil. He says his priority is popularizing electric cars.
“We’ve certainly chosen high growth over profitability,” he told reporters in September in Tokyo. “If the shareholders don’t like me, they can just fire me.”
‘Fantastic Vehicle’
If Musk’s competitors don’t always share his zeal for fighting climate change, they appreciate the cachet Tesla gives to the ZEV category.
“The Tesla is a fantastic vehicle,” says Raj Nair, head of global product development at Ford. “It’s made the public more open to this type of propulsion.”
At the Detroit auto show in January, Porsche said it was considering a plug-in electric version of its 911 flagship. Honda’s Acura division unveiled an NSX supercar with three battery-powered motors and a gasoline engine. Audi, General Motors, Honda, Hyundai, Mercedes-Benz, and Nissan all spun out plans for battery-powered cars to compete with Tesla.
GM, Ford, and Renault buy their batteries from LG Chem Power, a unit of South Korea’s biggest chemical company. CEO Prabhakar Patil says his company doesn’t need a Gigafactory to compete with Tesla on costs. And he says Musk may be placing too big a bet on electric cars.
No one knows, he says, whether fuel cells, plug-in hybrids, or battery-only cars will prevail.
Cautionary Tale
Electric-car makers already have a cautionary tale to study. Nissan and its partner Renault committed $6 billion to their all-electric Leaf compact, including plans to manufacture 500,000 cars a year. In 2014, they sold 82,602. One factor in the car’s disappointing sales is that it travels just 84 miles between charges. Tesla’s Model S has helped reset the standard at 200 miles, auto executives say.
“The batteries are getting lighter, cheaper, and smaller,” Carlos Ghosn, CEO of Nissan and Renault, told reporters at the Detroit auto show. “This is totally normal with the amount of investment we are all doing. And we will be competing with the 200-mile car.”
As Musk strives to create a viable company for the long term, his most formidable challenger could be Toyota. The Japanese company swears by hydrogen fuel cells — batterylike devices that produce power through an electrochemical reaction of hydrogen and air, with water vapor as the only byproduct.
Fuel Cells or Fool Cells
The company started marketing its Mirai fuel-cell car for $61,000 in Japan in December and hopes eventually to be selling hundreds of thousands a year, says Yoshimi Inaba, chairman of North American sales. The Mirai travels 300 miles with a hydrogen tank that can be refilled in five minutes. With high-volume manufacturing, Toyota has cut the cost of handbuilt fuel-cell components by 95 percent since 2008, says Satoshi Ogiso, a Toyota executive who helped develop the hybrid Prius. During the next decade, he says, Toyota expects to cut today’s production costs of the Mirai by two-thirds.
Toyota and Tesla once had a close relationship — and Khobi Brooklyn, a Tesla spokeswoman, says they still do. In 2010, Toyota sold Tesla its abandoned Fremont factory for $42 million. A new plant could have cost $1 billion, says Ron Harbour, a partner at New York consulting company Oliver Wyman Group. Toyota then bought electric motors from Tesla for two years.
Today, in Toyota’s view, the companies are drifting apart. “Our relationship with Tesla is not going upward; it’s going stagnant at best,” Inaba says.
‘Fool Cells’?
Toyota didn’t learn much from Musk’s technology and doesn’t expect Tesla to ever sell 500,000 electric cars a year, he adds.
Musk says most commercial hydrogen to run fuel cells is made from natural gas in a process that consumes energy and emits carbon. Hydrogen is also dangerous to store and transport, he says.
“Fuel cells should be renamed ‘fool cells,’” Musk said in a 2013 Bloomberg News interview.
“I think this is not classy,” Inaba says of the remark.
Of course, much of the electricity for recharging Teslas comes from coal. Yet Musk says electric motors are so much more efficient than those that run on gasoline that they are cleaner even if all the electricity comes from hydrocarbons.
Whatever the merits of fuel cells, all automakers are rushing to electrify. By 2023, battery-powered-car deliveries, including gas-electric hybrids, could triple to 6.1 million worldwide, says Sam Jaffe, a Navigant Consulting analyst in Boulder, Colorado.
ZEV Requirements
A big motivator is California’s air pollution control regulations, which require the six biggest automakers to derive 4 percent of sales from zero-emission cars this year. Nine other states, including New York and Oregon, have similar laws.
By the 2018 model year, the ZEV requirement in all those states will jump to 15.4 percent and include smaller companies such as BMW.
The new rules are a great boon to Tesla. Electric-car buyers receive $7,500 in federal tax credits and, if they live in California, $2,500 from that state, where Tesla sold 6,110 Model S’s last year.
In addition, the 10 ZEV states distribute credits that companies can buy and sell to meet emissions targets. Companies that fall short of the targets can buy credits from companies that don’t to avoid fines.
At 2015 prices, these credits earn Tesla $14,000 for every Model S sold in the 10 states, people familiar with the situation say. (Details of the transactions aren’t public.)
Battery Swaps
Tesla can earn another $17,500 in credits every time a Model S swaps its battery pack for a fully charged new one at an experimental station north of Los Angeles.
Each car is allowed 25 swaps, with total credit-eligible visits capped at the number of cars Tesla sells each year in the state.
Dan Sperling, an environmental engineering professor at the University of California at Davis and a member of the state’s Air Resources Board, defends the ZEV program as a way to promote technologies California needs to cut carbon emissions. Still, he expects the Air Resources Board to reduce credits for battery swaps.
“We want to be generous in supporting these technologies, not obscene,” he says.
If nothing changes, Tesla could make enough money selling credits — as much as $500 million a year — to fund a quarter of its capital expenses, says Morgan Stanley’s Jonas.
Cheaper Batteries
When he was designing the Model S, Musk chose lithium-ion battery packs that in 2009 cost $1,200 per kilowatt hour, Jaffe says. The Gigafactory, by consolidating an extensive global supply chain, could help reduce the cost to as little as $250 by 2020 — low enough to make batteries competitive with gasoline engines, he says.
To build a $35,000 car, Tesla will need more than cheaper batteries. Tesla executives say it will have to make optional some of the equipment that’s now standard on the Model S and buy more generic components, such as shock absorbers, from high-volume suppliers.
And the company will need higher productivity. The Fremont plant today boasts some cutting-edge technologies, such as a device that uses air under high pressure to twist hot aluminum sheets into complex shapes. But the production process also includes labor-intensive operations incompatible with mass production.
Labor Intensive
For instance, just after body panels leave the stamping presses, workers use files and rasps to smooth out their surfaces. Other workers assemble bundles of wires that connect hundreds of components — a job usually outsourced to a cheap-labor foreign country.
Tesla does such jobs in-house in part because it’s making design improvements to the Model S “20 times a week,” says Greg Reichow, Tesla’s manufacturing vice president. He says Tesla is rapidly deploying more automation. Producing a new electric motor for the dual-motor Model S requires one-sixth of the manpower devoted to prior designs, he says.
Musk says he’s determined to conquer the mass market because the world needs electric cars, even though, for the moment, hydraulic fracturing has lowered gasoline prices dramatically and made driving gas-powered cars cheaper.
“Fracking probably increases the accessible oil and gas in the world by a factor of 10,” Musk said in Detroit in January. “We’re really going to regret the amount of carbon we’re putting into the oceans and atmosphere.”
Loading Up
Rolling through fire-scarred canyons above Los Angeles on a hazy afternoon, Chris Ziegler says he’s confident Tesla will make the world a better place. Meanwhile, he’s loading up. In addition to his Model S, he owns a $109,000 Roadster that Tesla discontinued in 2012, and he’s one of 20,000 people on the waiting list for a gull-wing SUV.
He never tires of driving his Model S. After showing off its speed and agility, he apologizes for resuming normal driving.
“I’ll get motion sickness,” he says.
Praise from owners such as Ziegler, together with the long waiting list, underscores Musk’s success as an auto designer and manufacturer. The question for investors is, will the entrepreneur ever be as proficient at making money as he is at making cars?

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Blackberry Battles Google For The Connected Car Market

QNX generates only a small fraction of BlackBerry’s revenue — results for the division aren’t broken out, but “software and other” accounted for about 8% of BlackBerry’s total revenue in its most recent quarter. However, the in-vehicle software market is one of the only areas left where the company can claim supremacy.

BlackBerry Ltd’s QNX claims supremacy in the connected car, but Google’s Android is gaining ground

QNX generates only a small fraction of BlackBerry’s revenue — results for the division aren’t broken out, but “software and other” accounted for about 8% of BlackBerry’s total revenue in its most recent quarter. However, the in-vehicle software market is one of the only areas left where the company can claim supremacy.

Even before things started to really go south for BlackBerry Ltd., it was clear that its purchase of QNX Software Systems in April 2010 was a transformative acquisition. The deal gave Research In Motion, as it was then known, the basis for its next operating system and, vitally, provided a foot in the door of the emerging connected-car market.

Owning BlackBerry Ltd. shares requires a strong stomach and over the last few months many investors have decided to say goodbye to the stock’s dips and peaks

BlackBerry’s decline over the next few years is well-trodden territory, with the once-dominant company’s share of the global smartphone market collapsing to 0.5% by the third quarter of 2014. But, unlike so many other decisions BlackBerry made in the interim, the acquisition of QNX was a success. The Ottawa-based company, which was founded by two University of Waterloo graduates in the early 1980s, had already established its presence in the global auto industry when it was acquired by Stanford, Conn.-based Harman International Industries in 2004. Harman greatly increased QNX’s presence in cars, making it an industry leader by the time the 270-employee company was sold to Research In Motion.

Today, thanks to QNX, BlackBerry commands more than half of the rapidly growing market for in-vehicle infotainment — software that manages everything from music and phone calls to navigation and weather forecasts in your car.

QNX generates only a small fraction of BlackBerry’s revenue — results for the division aren’t broken out, but “software and other” accounted for about 8% of BlackBerry’s total revenue in its most recent quarter. However, the in-vehicle software market is one of the only areas left where the company can claim supremacy.

“Not only is the demand in the individual vehicles skyrocketing, but the demand in each vehicle — how many systems can run on our operating system — is skyrocketing too,” Andrew Poliak, QNX’s global director of automotive business development, said in a recent interview.

He added that more than half of QNX’s revenue comes from the auto industry.

A 2013 forecast from the GSM Association of mobile operators predicted that the connected-car market will be worth €39 billion (about $56 billion) by 2018, triple its value in 2012, thanks to a sevenfold increase in the number of new cars with mobile connectivity.

And Mark Boyadjis, senior automotive technology analyst at IHS, estimates that there will be 400 million connected cars on the road by 2020, up from 82 million in 2014

TESLA – Attracts Mutual Funds

These 3 Funds Are Loading Up On Tesla
Benzinga By Kate Stalter
1 hour ago

Tesla Motors Inc (NASDAQ: TSLA) has been one of the more popular IPOs of the past few years.

The number of U.S. mutual funds and hedge funds owning the stock has steadily risen in recent quarters. With a market capitalization of about $30 billion, the stock fits into the large-cap category. It’s part of the consumer cyclical sector, so that’s another fund category where the stock may appear.

Despite Tesla’s market cap, it’s a volatile stock, with a beta of 1.87. That means it’s more volatile than the broader market. For funds with significant holdings in Tesla, that volatility may show up in changes to Net Asset Value.

Who Holds Tesla?

Harbor Capital Appreciation Fund (MUTF: HACAX) has a large-cap focus. It seeks to invest in companies with superior earnings and sales growth, improving sales momentum, growing profitability and strong balance sheets, among other factors.

The fund, sub-advised by Jennison Associates, invests primarily in U.S. companies with a market caps of at least $1 billion at the time of purchase. The fund holds 0.97 percent of Tesla shares, totaling 1.21 percent of fund assets.

DoubleLine Capital Owns Tesla Motors Shares As It Could ‘Change Society’ TheStreet q 54 mins ago

The Fidelity Advisor New Insights Fund (MUTF: FNIAX) holds 0.71 percent of Tesla shares, accounting for 0.79 percent of the fund’s assets. This fund, which was established in 2003, is managed by Will Danoff, who also manages the Fidelity Contrafund.

The Fidelity Advisor New Insights Fund invests in growth and value stocks of mid- and large-cap companies in the U.S. and overseas. Financial services, technology and healthcare are the largest sectors in the fund.

Its one-year return is 12.7 percent.

The JPMorgan Large Cap Growth Select (MUTF: SEEGX) holds 0.85 percent of Tesla shares, totaling 1.72 percent of fund assets. This is not a fund that a casual investor can just drop into; the minimum investment is $1 million.

The fund seeks to invests at least 80 percent of its assets in stocks of large, well-established companies with above-average growth, or that are forecast to have superior growth in the near future.

Top sectors are healthcare, technology and consumer cyclical. The fund’s one-year total return is 16.4 percent.

Morgan Stanley Slashes Tesla Estimates

Just getting this note from Adam Jonas at Morgan Stanley.

Tesla Motors Inc.
Cutting 2015 Model X Deliveries
to 5k from 15k

Following 3Q results, updated outlook and Model X
launch delay, we are making significant adjustments
to our 2014 and 2015 earnings forecasts, leaving our
target unchanged at $320. Tesla has some execution
hurdles to surmount, but we’d still be buyers.

Cutting our 2015 Model X delivery forecast to 5,000 units from 15,000
previously. We have adopted our Model X forecasts not only for a 3Q launch (which weexpect to belate 3Q), butalso for a slow ramp once deliveries begin. Our forecasts apply what we believe to be reasonable execution risk on this important model to ensure uncompromising quality of initial units.We recently raised a question about whether a seemingly mundane attribute of thecar, thefalcon doors,could prove to be a technical challenge at scale. See our November 17th report: Tesla Motors: Will Tesla Ditch the Falcon Doors on the Model X?

2015 EPS forecast reduced by 44% to $2.45 vs.consensus at $2.99.

The shortfall vs.consensus for 2015 is driven by our non-GAAP revenue
assumption of $5.6bn (consensus at $6.2bn). We have partially offset the
Model X shortfall with an increasein our Model S delivery forecast to 48,000 from 45,000 previously (management target of around 50,000 units).

We believe the Model X is critical to the Tesla story and execution on
this product is critical. There is a lot about the Model X which may be easier to execute upon vs. the Model S given high levels of commonality and experience with thefactory. However, there are still some unique attributes to the vehicle that could present a near-term challenge. We would look for any hiccups/delays as an opportunity to increase exposure to what we believe is the most important manufacturer in global autos.

Valuation Methodology:
We argue Tesla cannot bevalued on near-term multiple metrics like traditional auto companies given that we expect Tesla to multiply revenues by morethan 10x from 2013 to 2016 by nearly 30x by 2020 and around 60x by 2028.We havethus chosen a 15-year time horizon for our DCF which captures thefull maturation of the Model S, Model X (and top-hat derivatives) and also theramp up of its mass market electric vehicle (the Gen 3). We have applied a 11% WACC with a range of 9% to 13%.Theterminal value,calculated on a midpoint of 10x EV/EBITDA accounts for roughly 50% of thetotal DCF value across the range of methodologies we have applied to arrive at our PT.

Google To Start Building Self-driving Cars

Google is to start building its own self-driving cars, rather than modifying vehicles built by other manufacturers.

The car will have a stop-go button but no controls, steering wheel or pedals.

Pictures of the Google vehicle show it looks like a city car with a “friendly” face, designed to make it seem non-threatening and help people accept self-driving technology.

Co-founder Sergey Brin revealed the plans at a conference in California.

“We’re really excited about this vehicle – it’s something that will allow us to really push the capabilities of self driving technology, and understand the limitations,” said Chris Urmson, director of the company’s self-driving project.

He added that the cars had the ability to “improve people’s lives by transforming mobility”.

But some researchers working in this field are investigating potential downsides to driverless car technology.

They believe they could make traffic and urban sprawl worse, as people accept longer commutes as they do not have to drive themselves.

Flexible windscreen

The BBC was given access to the Google team to talk about the secret project, and see early renderings of the car.

It looks almost cartoon-like, it has no traditional bonnet at the front, and the wheels are pushed to the corners.

Google self-drive carGoogle says it will initially build 100 prototype vehicles

It will seat two people, propulsion will be electric, and at the start it will be limited to 25mph (40km/h) to help ensure safety.

The most significant thing about the design is that it does not have any controls, apart from a stop/go button.

For early testing, extra controls will be fitted so one of Google’s test drivers can take over if there is a problem.

The controls will simply plug in, and Mr Urmson believes that over time, as confidence in the technology grows, they will be removed entirely.

The front end of the vehicle is designed to be safer for pedestrians, with a soft foam-like material where a traditional bumper would be, and a more flexible windscreen, which may help reduce injuries.

The vehicle will use a combination of laser and radar sensors along with camera data to drive autonomously.

It will depend on Google’s road maps, built specifically for the programme, and tested on the company’s current fleet of vehicles.

Google self-drive carGoogle says it expects its self-drive cars to be on the road ‘within a year’

Ready in a year

Google recently announced that its self driving cars had covered 700,000 miles of public roads in autonomous mode, and that they were now tackling the tricky problem of busy city streets.

The company plans to build a fleet of around 200 of the cars in Detroit, with the hope of using them as an autonomous technology test bed.

“We’ll see these vehicles on the road within the year,” says Mr Urmson.

Advocates claim that autonomous cars have the potential to revolutionise transport, by making roads safer, eliminating crashes, and decreasing congestion and pollution. In the year to June 2013, more than 23,500 people were killed or seriously injured in road traffic accidents in the UK,according to government figures.

Simulation of roadThe view from Google’s self-drive car and its computer during tests

Ron Medford, previously the deputy director of the US National Highway Traffic Safety Administration, and now the safety director for the self-driving car team at Google, believes that number could be drastically reduced by removing the chance of driver error.

“I think it has the potential to be the most important safety technology that the auto industry has ever seen,” he said.

But Sven Beiker, executive director of the Center for Automotive Research at Stanford, cautions that driverless cars may still require human input in extreme circumstances and that people may forget how to operate their vehicles if they do not do it regularly.

This could be particularly dangerous in an emergency situation where the computer does not know how to react, and asks for input from a human who may not have been paying attention, he warned.

“You will not be able to fiddle around looking for the instruction manual in the glove box that you’ve never looked at before,” he said.

He equates it to people who drive automatics forgetting how to easily drive a car with a manual gearbox.