Morgan Stanley analyst Adam Jonas seriously downgraded his expectations of the TSLA stock from $70 down to $44. That's still up from the current rate of around $31, but it's enough to cause a nine percent drop in today's trading. We have to side with former Tesla employee Darryl Siry, who asks, "How do you slap a sell rating with a $44 price target on a stock trading at around $35?" We certainly don't understand stocks.
Jonas, a long-time Tesla fan, sure uses positive words to describe what Tesla is doing – "Tesla has orchestrated a near flawless execution through the Model S pre-production phase. ... We expect the Model S to launch on time in July, but to ramp up slower than consensus expectations as the company prioritizes delivery quality over quantity" – but in the stock market, that's apparently not enough. The reason for the Tesla downgrade is that Morgan Stanley is now taking an overall dismal view of plug-in vehicles. Instead of an 8.6 global market share by 2025, Morgan Stanley now predicts just 4.5 percent because traditional gas-powered cars are getting so much more efficient, plug-in vehicle sales have not matched expectations and Europe's economic crisis. So, Morgan Stanley is saying, no matter how good Tesla's EV are, the time just isn't right.