Tesla Chief Executive Elon Musk calls the merger between the EV firm and solar panel installer SolarCity a “no-brainer,” but analysts seem to disagree. Colin Rusch, a senior analyst with Oppenheimer, is one of them. Rusch also discussed whether a shift in the government’s view on autonomous driving could impact Tesla’s value in his recent note.

Tesla Motors TSLA

Future of autonomous driving

Rusch discussed Tesla’s future, referencing a mandate by the National Highway Traffic Safety Administration (NHTSA). The mandate revealed plans for research on safety issues and state recommendations related to the testing, licensing and regulation of “self-driving” or “autonomous” cars.

Rusch was not surprised by the mandate and said he understands the NHTSA’s goal of appropriately regulating emerging technologies to ensure the safety of the driver. The NHTSA anticipates that the first phase of its research will be completed within the next four years. It is possible that within that time, the government’s view towards autonomous driving will shift to a more hard-line approach, consequently affecting Tesla’s stock value. However, Rusch considers a potential shift to be low-risk to the electric car making giant.

“I think people are buying the product for how it performs, not for that one future. … Our real concern is around potential saturation on the high end,” the analyst said.

The senior analyst says that as the automaker introduces more low-end cars, he is planning to focus on the margins of those products.

Tesla – SolarCity deal not a good idea

Another event that could impact the stock of the electric car maker is Musk’s plan to merge SolarCity with Tesla. Musk told The Wall Street Journal on Wednesday that he expects a two-thirds majority of shareholders to vote in favor of the proposed merger.

Rusch said they have taken a hard look themselves in terms of what they think the possible synergies are.

“We still don’t think [the merger] a good use of capital,” the senior analyst said. “We’re looking for real generation of cash flow from [Tesla] … hitting the production and shipment number as well as the refinance numbers on the SolarCity side,” said Rusch.

Tesla’s CEO also revealed phase two of his much-awaited “masterplan,” which is to focus on selling integrated energy generation and storage, autonomous driving technology, and an expansion into other forms of ground transportation like trucks and buses. The automaker is also finally looking to let drivers share their vehicles with others in order to make money from the vehicle when the owner is not using it.