Tesla Motors Inc (TSLA) Price Target Upped After Survey

Tesla Motors Inc (TSLA) Price Target Upped After Survey

Tesla Motors may be showing early signs of one of the things that’s made Apple what it is today. Of course there have been many comparisons between the two companies, but this one is a bit different. A new survey indicates that Tesla owners are loyal to the brand—something analysts have been pointing out about Apple for years.

Tesla Motors (TSLA) appeals to a wide array of drivers

Jefferies analysts Dan Dolev and Trevor Young recently conducted a proprietary survey of about 145 Tesla owners and found some interesting results. Because of the results from their survey, they bumped up their price target for the EV manufacturer from $350 to $360 per share. They also reiterated their Buy rating on the company’s stock.

One of the key findings of the survey was that the majority of Tesla owners aren’t the typical buyers of luxury cars or EVs. The Jefferies team said this result goes against the usual expectation that Tesla owners are “a uniform group of luxury car buyers” like buyers of the Mercedes-Benz S-Class or BMW 7-Series. (All graphs in this article are courtesy Jefferies.)

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As you can see from the graph, there were 82 different substitute combustion engine models, with only about 25 of them being AVs. There’s also a wide array of price ranges for the cars Tesla owners might have otherwise bought, with 13 of the top 20 models being priced below $60,000 and four at less than $35,000.

Just a small percentage would have bought a car priced over $100,000 if they hadn’t bought a Tesla, and most owners had a car with an average selling price of less than $60,000 before their Tesla.


Tesla’s addressable may be bigger than previously thought

The Jefferies team also found that among Tesla owners, the average premium ascribed to Tesla is about 60%, which means that they would pay 60% more for a Tesla than they would for another car. Also most Tesla owners switched from internal combustion engine vehicles.


Dolev and Young suggest that these findings could expand Tesla’s total addressable market by about 75%. Including the Model S, Model X and Model 3, that would bring the EV manufacturer’s addressable market to about 19 million.


This is especially good news for Tesla’s Model 3, which is expected to be priced around $35,000 for the base model.


Stickiness will help Tesla (TSLA)

The analysts also found that brand loyalty among Tesla owners is “exceptional,” with 85% saying their next car would definitely be a Tesla. The survey also indicated that 83% would recommend a Tesla to their friend, and 89% would still purchase a Tesla if the government subsidies were ended.



Another thing that was interesting about the survey was the lack of interest in battery swapping. On the surface, it would seem as if battery swapping would increase the stickiness of the Tesla brand. However, 54% of the survey’s respondents said they probably wouldn’t use the battery swapping stations from Tesla.

Instead, they would prefer that the automaker develop faster charging methods. TSLA’s rapid expansion of its Superchargers is clearly a good move that could increase the stickiness of the brand. The key is going to be finding other value-added services to offer as well.

As of this writing, shares of TSLA were up 1.99% at $270.44 per share.

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