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Investors back Tesla over Toyota & GM to lead tech shift in the sector

Author : Pankaj Singh | Published Date : 2020-04-24 

Before the emergence of coronavirus, the automotive industry had been undergoing a transition from fuel-based vehicles to electric vehicles. To that end, investors are more likely to invest in Tesla rather than industry giants like, Toyota and GM to drive the automotive industry’s shift towards autonomous and electric vehicles.

Elon Musk’s Tesla has created a brand name and is currently at the top in terms of innovation and manufacturing of electric vehicles while global automotive giant Toyota has not entered the electric vehicle field with a serious contender of its own yet.  

As per recent stock market numbers, Tesla’s stock price was up about 80% year-to-date. Meanwhile, GM and Ford were down at 40% and 45% respectively.

Analysts and investors are currently working to understand industry trends with several projecting that Tesla is likely to emerge out of the current global crisis as an automaker that is much stronger than other industry players.

Adam Jonas, Morgan Stanley auto analyst stated that in a year that is shaping up as a massively challenging period for the global automotive market, several investors are comparing the attractiveness and resiliency of traditional auto OEMs against Tesla.

Jonas and his team predict that Tesla’s free cash flow position would be greater than the rest of the auto companies this year. On the basis discussions with investors, most anticipate Tesla to burn about $1 billion or more of free cash flow in 2020 and still see near FY unit growth between 5% - 10% or more in terms of volume.  

The investors are divided on the possibility of the automotive market benefiting from the ongoing transition to autonomous and electric vehicles, but there is consensus on which company is in a much better position and is likely to lead this transition.

As per the conducted survey, 54% of the investors would back Tesla to lead this transition rather than Toyota or GM.

Source credit: https://electrek.co/2020/04/22/tesla-tsla-gm-toyota-lead-auto-industry/

 

About Author

Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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