Morgan Stanley analyst sees the end of “human driving” image

With the advent of the autonomous cars in our lives, analysts are also in the race for predictions – which kind of reminds us of astrology and horoscopes.

The only thing is that some of them, like Morgan Stanley analyst Adam Jonas, are so powerful they can create stock collapses with just one note. This is what happened yesterday to Tesla’s shares, taking a dive of more than 9% to $253 a share at the close. That’s because Jonas said in his note that “human driving” is coming to an end and that Tesla could be out of the auto making game from that point on.

“In an autonomous world, why will people buy a Tesla? Our 15 year DCF [Discounted Cash Flow] coincides with the end of human driving and the dawn of crowd source mobility and mega fleets. Assuming people even buy cars at all, what will determine Tesla’s strategic and competitive advantage as a provider of mobility? We see scope for an array of new entrants who can apply Moore’s Law and computing power to move people and things around the surface of the earth. The rules are changing and at least some incumbent OEMs (i.e. BMW) are not falling asleep at the (disappearing) steering wheel,” he commented in the note released yesterday.

Besides the underlying consequences for Tesla in this particular case, the remarks made by the analyst also seem to be stretching towards the area of missionary/apocalyptic statements. Bullish statements like these have been made in the past, but time will tell if the auto industry will be so deeply revolutionized in just a few short years.

Via Business Insider