Tesla announcement not near-term risk for ON Semiconductor, says Citi

ON Semiconductor (ON) shares moved lower after Tesla (TSLA) announced that it can use 75% less silicon carbide in its next generation powertrain during its investor day, Citi analyst Christopher Danely the analyst tells investors in a research note. The firm believes a way Tesla can use 75% less silicon carbide is through its upcoming lower-cost Model 2 car that has been speculated about in numerous press announcements. It also notes that ON has long-term supply agreements with its silicon carbide customers extending for the next 4-5 years, "which would help ensure the revenue ramp." Citi reiterates a Buy rating on the shares with a $95 price target saying it does not believe the Tesla announcement is a near-term risk.