Berenberg’s Paul Kratz shares publishes a note on Tesla from the NAIAS, after attending Gigafactory event

Published By: Eunice Gettys on January 11, 2017 12:23 pm EST

Earlier today, TheCountryCaller reported that Tesla Motors Inc (NASDAQ:TSLA) is likely the only car manufacturer that refuses to take part in the North American International Auto Show (NAIAS) in Detroit, MI, where analysts, experts, and guests have gathered to see new technologies. Berenberg analyst Paul Kratz was also present at the US biggest automotive event of the year, sharing his view on Tesla latest investor event at the Gigafactory in Sparks, NV.

The analyst maintained his Neutral rating on Tesla shares along with price target of $193, based on a analysis of probability-weighted scenario and representing a potential downside of over 15%. As of 10:41 AM EST, the shares were trading down 0.81% at $228.02.

“After showing analysts its Gigafactory plant in Nevada last week, the company again emphasized the competitive advantages this brings to Tesla,” Mr. Kratz wrote.

He added that the Californian electric vehicle (EV) maker continues to believe that it is the industry leader in terms of battery technology and costs. Though, it never publically revealed how much does a battery pack costs it. The management said that traditional car manufacturers do not have as big battery capacity as Tesla does; therefore, it is in a better position to capitalize on the growing adoption of battery-powered cars.

While the company believes that it is the “key catalysts for the transition of EV mobility,” the investment firm thinks that a wave of recent EV announcement by competition, such as Daimler, General Motors, and Volkswagen, creates skepticism on its claim that traditional automakers do not have EV models.

Though, Mr. Kratz added that Tesla cars are relatively more visible as compared to other automakers as it will likely have the “most significant EV production capacity” in the near future, mainly on the back of its battery manufacturing capabilities.

The German firm re-initiated coverage on Tesla last November, expects risks associated with the Model 3 launch and SolarCity merger. It anticipates the company’s losses to continue increasing through 2018, while having doubts on the vehicle gross margins.