Tesla’s edge reflects view Musk can build on EV lead

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  • Wednesday, 05 Feb 2020

Pole position: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China. ‘There’s a recognition that Tesla is in a preeminent position in terms of EV technology, ’ Peter Rawlinson, the CEO of upstart Lucid Motors Inc, said in an interview on Monday at the BloombergNEF Summit in San Francisco. — Reuters

NEW YORK: For a few tumultuous years, Tesla Inc gave the bulls reason to believe and bears reason to doubt. Sure, Elon Musk was pulling off what legacy automakers tried and failed to do - make electric cars cool - but he was presiding over an inexperienced enterprise, and the old guard would catch up.

As Tesla observers try to understand how and why the stock has tripled in a little more than three months, analysts and Musk’s own rivals are second-guessing the notion that the Model 3 maker will be caught anytime soon.

“There’s a recognition that Tesla is in a preeminent position in terms of EV technology, ” Peter Rawlinson, the chief executive officer of upstart Lucid Motors Inc, said in an interview Monday at the BloombergNEF Summit in San Francisco. “They’re even further ahead than has been reported, and I think the gap is widening, not closing.”

The praise echoes comments made recently by the CEO of Volkswagen AG, the world’s largest automaker. Tesla usurped the German manufacturing giant by market capitalization on Jan 22. Not even two weeks later, its US$140.6bil value exceeded VW’s by about US$50bil at the close of Monday trading.

Cars will “become the most important mobile device, ” VW’s Herbert Diess told top executives at an internal meeting last month.

“If we see that, then we also understand why Tesla is so valuable from the view of analysts, ” he added, lamenting that VW isn’t also looked at as tech-like.

Rawlinson, who was chief engineer of the Model S before joining Lucid in 2013, wasn’t always this positive, even going so far as to talk down his former employer’s product.

“I contend that Tesla is not truly luxury, ” he told Bloomberg News in September 2018, when Lucid had just secured a US$1bil investment and Musk was less than a month removed from trying and failing to take Tesla private. Rawlinson said then that Teslas were “premium and high-tech, but not luxury.”

On Monday, he reiterated his view that the interiors of Tesla’s cars fall short.

But since that earlier interview, Musk has built a commanding lead in the still-fledgling US EV market, and the Model 3 has risen to become one of the top-selling cars in Europe -- electric or otherwise.

Tesla needed only a year to construct its first overseas assembly plant in China and last month started deliveries of locally built sedans.

By March, it plans to begin handing over Model Ys to customers, months ahead of schedule.

“We think they are pretty far ahead in battery and EV technology, ” Adam Jonas, an analyst at Morgan Stanley, said in an interview. “Tesla has moved from being seen as an auto stock to be seeing as a tech stock” that is “mentioned in the same breath as Amazon, Apple and Google.” — Bloomberg

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