What Volvo’s Electric Car Ambitions Mean for Tesla
As analysts weigh in on Volvo’s electric and hybrid vehicle plans—with a mix of reactions ranging from skeptical and “meh” to cautious optimism and even enthusiasm— the news prompted at least one to conclude that it doesn’t bode well for Tesla. Or at the very least should provide a wake-up call to the company and its shareholders.
Tesla believers will likely view Volvo’s declaration that every new car made in 2019 and beyond will have an electric motor as a validation of CEO Elon Musk’s vision of a future of sustainable, electric transportation, Barclays auto analyst Brian A. Johnson wrote in a research note Wednesday.
Johnson takes a different, and darker, view, saying it provides more evidence (especially after a recent visit to China) that “Tesla will face intense competition by next decade” from legacy automakers who are expanding their electric options.
Johnson makes three points that he describes as “reality checks” on Tesla’s valuation. His main points:
Of course, Musk’s reaction to all of this will likely follow previous comments about automakers deciding to produce electric vehicles: the more, the merrier.
