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Tesla Plunges as Analyst Delivery Warning Adds to Week of Losses

Tom Lavell
Tesla Plunges as Analyst Delivery Warning Adds to Week of Losses

(Bloomberg) -- Tesla Inc. dropped 4.4% in U.S. pre-market trading as analysts at Loup Ventures and Morgan Stanley gave increasingly bearish commentary on the U.S. electric-car maker.

Loup Ventures co-founder Gene Munster wrote in a note that Tesla will probably miss its 2019 delivery target range as sales shrink in China amid a trade war between the two countries. The analyst cut his estimate for Tesla’s full-year global car sales by about 10% to 310,000 vehicles, versus the minimum 360,000-unit target the manufacturer set in March. The shares are poised for their seventh day of losses and are down 27% over the past month.

“We are lowering our numbers as a precautionary measure related to two unknowns,” including China’s probable imposition of tariffs on Tesla car imports as well as other impediments such as new regulations on sales or a potential consumer boycott of U.S. goods, Munster said. Loup’s pessimism on the import fees is a “minority view,” discounting most investors’ expectation that Tesla will remain exempt because of its investment in a Chinese battery factory, he said.

Compounding woes for the company, Morgan Stanley analyst Adam Jonas, who earlier this week said that Tesla stock could plunge to as low as $10 in a worst-case scenario, held a private call with investors Wednesday in which he said the company is “seen more as a distressed credit and restructuring story.”

Tesla is likely to survive as the worldwide electric-vehicle market surges, Loup’s Munster said. Recent fund-raising gives the manufacturer a two-year cash cushion as long as deliveries exceed 300,000 a year through 2020, though the protective timeframe narrows if vehicle sales fall below that level, he said.

(Updates with pre-market trading.)

--With assistance from Jan-Patrick Barnert.

To contact the reporter on this story: Tom Lavell in Frankfurt at tlavell@bloomberg.net

To contact the editor responsible for this story: Beth Mellor at bmellor@bloomberg.net

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