Deutsche Bank Securities Analyst Made the Right Call in One of the Top 10 Equity Analyst Interviews of 2013: Dan Galves, Vice President with the Global Auto/Auto Parts Equity Research Team

Wall Street Transcript

67 WALL STREET, New York - December 6, 2013 - The Wall Street Transcript has just published its Top Ten Equity Analyst Interviews 2013 Report. This special feature contains expert industry commentary through in-depth interviews with highly experienced Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Electric Powered Vehicles and Solar Energy Stocks

Companies include: Tesla Motors (TSLA)

In the following excerpt from the Top Ten Equity Analyst Interviews 2013 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: You recently upgraded [ed. note: August, 2013] Tesla from a "hold" to a "buy." What factors contributed to your rating change?

Mr. Galves: I think we've always had confidence in Tesla's (TSLA) capability, but for a long time we had a "neutral" rating on the stock, because we were very focused, maybe overly focused, on the risks. After a lot of time with the company, we are now much more comfortable with those risks. We expect Tesla to continue to execute, surprise to the upside, and we expect investors will continue to value this as a disruptive tech company.

I would say that in the big picture, we had some concerns with some initial minor quality - fairly minor quality issues with the vehicle - that was one of the risks we were looking at, because in order to drive consumer confidence, a startup automaker needs to probably have quality better than a normal automaker, just to engender confidence. I think when consumer reports called Tesla's model the best vehicle they have ever tested, I think it spoke to an amazing talent within the company. It also spoke to our belief that EVs, for many inherent reasons, have potential to simply be better cars. That was the core theme of a report we wrote in 2008 called "Plugged In," and we think Tesla is in the process of proving that.

We've always thought that there are a lot of inherent advantages in electric vehicles. I'll give you a couple of examples: lower fueling cost per mile, lower maintenance cost, better acceleration, better handling because the weight of the battery at the bottom of the car can make a very low center of gravity, very balanced vehicle, better interior space, quietness.

And something that I think people don't really realize is the ability to just refuel at home overnight, so when you wake up every morning you always start with a full tank of fuel.

So we see those inherent advantages in EVs, but clearly you need to...

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