Guest essay by Eric Worrall

Tesla is “overvalued” according to the Nordea Global Climate and Environmental Fund.

Tesla Is Dropped by Climate Fund That’s Beaten 97% of Its Peers

By Jonas Cho Walsgard
3 October 2017, 00:13 GMT+10 3 October 2017, 08:01 GMT+10

Tesla Inc. is overvalued, according to a climate fund that has beaten 97 percent of its peers.

“We don’t see upside,” Thomas Sorensen, who manages the Nordea Global Climate and Environmental Fund, said by phone on Thursday. “What’s needed in cash flow generation to get to the current valuation — we don’t see that happening.”

With more and more climate-friendly products and services coming to market, investors are having a hard time valuing new technology. Tesla’s 60 percent share rise so far this year is testament to investor enthusiasm even as it reported losses in both the first and second quarter. But the turmoil created by the electric car’s rise that roiled traditional carmakers now means greater risk for all manufacturers.

“It’s going to be a race to the bottom for the whole industry,” he said. “In this big transition period, it’s very tough to point out the winners and the overall profitability of the sector. The risks are too high.”

…

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This is not the first time investors have expressed concern about competition in the electric car market. Back in July this year analysts expressed concern about Tesla’s ability to compete against the likes of Volvo.

… Tesla will soon have more competition coming from major carmakers, Barclays Plc analyst Brian Johnson said.

“We’ve long argued that Tesla as an EV company is not truly disruptive, in that legacy carmakers will eventually wake up and offer fully electric vehicles by the early 2020s,” …

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Earlier today WUWT reported about how Tesla “narrowly” missed their Q3 model 3 delivery target by 83%.