Tesla’s (NASDAQ:TSLA) state as the leader in the electric vehicle market never really looked this shaky before. With a slew of Chinese EV companies stepping in and even the big legacy automakers like Ford (NYSE:F) and General Motors (NYSE:GM) making plays, Tesla may be in for the fight of its life. At least, that’s what word from Wedbush analyst Dan Ives suggests.
“An all-out ‘Game of Thrones’ battle.” That’s how Dan Ives described the current state of the market. Tesla has already built out its infrastructure. Battery production, brand recognition, and the sheer notoriety of its CEO give Tesla a lot of advantages in the field. That, Ives suggests, means that Ford and GM will likely “…have to sacrifice margins” in a bid to draw in customers. Thus, the price cuts that Tesla already engaged in are likely a survival move ahead of the need for one.
However, not every analyst agrees with Ives about ongoing price wars. For instance, John Murphy with Bank of America (NYSE:BAC) believes that the industry will not “…break out into an all-out price war that was the defining character of the industry in the 2000s.” Further, Murphy notes that price cuts generally aren’t done to capture market share in the opening days of a growing market. Rather, they’re usually used to recapture faltering demand.
Interestingly, all three firms’ shares have a place in Wall Street’s collective heart. Analyst consensus calls each a Moderate Buy. Yet, Tesla stock has the weakest upside potential at 11.64% due to its average price target of $192.75 per share. Yet Ford’s average price target of $15.80 gives its stock 17.43% upside potential.
