Musk's 'Master Plan 3' Gets An Underwhelming Reaction, Causing Tesla Stock To Fall Nearly 7%

Analyst says first-ever investor day was short on specifics and long on vision

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Stocks of Tesla Inc. fell nearly 7% on Thursday as investors continued to blame the electric-vehicle maker for hosting a shareholder day that had few details and did little to bridge the divide between bulls and bears over Tesla's future prospects.

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In the third session of its losing streak, Tesla stock was on track for the lowest close since Feb. 3, when it closed at $189.98, taking its losses to a third session in a row.

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The electric car maker held its first investor day late Wednesday, teasing its "next generation" platform for electric vehicles but deferring questions about timing, looks, and production to a later product event yet to be scheduled.

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There was a strong focus on showcasing Tesla's capabilities during the four-hour presentation, as well as addressing global aspirations in regard to electrification and sustainability.

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The Piper Sandler senior managing director, Alex Potter, said that “he spoke with a number of Tesla clients at the event and that he came away with a sense that the initial response was muted (at best), and that more information was needed”.

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“Despite the fact that a full-scale product unveiling wasn't on the cards, I had also hoped to see a bit more meat on the bone,” Potter explained.

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“In other words, we were disappointed, in the same way as everyone else, that the company did not communicate with us more effectively. As it grew more apparent, however, that it would not be in the character of (Tesla) to provide explicit financial guidance, so in this regard, neither we were surprised nor disappointed," the analyst added.

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Dan Ives, an analyst at Wedbush Securities who is known for being a Tesla bull, said in a note Thursday that Tesla's story remains compelling.

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Although there are no "specific details" about the cheaper next-generation Tesla vehicle, which is expected to be priced under $30,000, he said that "the scene is set for this car to be made and scaled globally," he said.

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As a whole, Tesla still comes out on top in the electric vehicle market, while its competitors are just starting to climb the hill, he stated.

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Ben Kallo, an analyst with Baird Equity Research, believes Tesla is several years ahead of the competition on a number of fronts as well.

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A ‘clear vision and path’ has been set out by the company to introduce the next generation of electric vehicles, and the platform is expected to improve product affordability, drive cost and efficiency improvements through innovation, as well as benefit from scale.”

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There were also those who remained skeptical. Bernstein Toni Sacconaghi said that the company's investor day was short on specifics, but long on vision.

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Taking Tesla's approach to the new vehicle, which involves "getting the initial design and production as locked in as possible before moving forward," may indicate a longer time to market for the vehicle, Sacconaghi said.

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“Tesla will not be able to deliver a low-cost offering in volume before 2025, and as such, we believe the company will need to lower its prices in the interim if it is to meet its growth targets in the next two years,” he said.

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Sacconaghi said the event essentially confirmed Tesla's "bull case" that it has a structural cost advantage that it will use to reach an "unprecedented scale."

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“Tesla has an undeniable cost advantage over developed-market competitors today, but we believe that competitors will gradually close the gap," he said.

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Jeff Osborne with Cowen wrote in his note to investors that the attention of investors is going to shift to the first-quarter deliveries, and whether Tesla's January price cuts had an impact on demand.

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In early April, Tesla is expected to release its quarterly sales report, a proxy for the company's quarterly deliveries.

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Tesla has an overweight or buys rating from 30 FactSet analysts, a hold rating from 11 analysts, and an underweight or sells rating from five analysts.

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Compared with the S&P 500 index, Tesla shares have lost about 35% in the past year. 0.50% for the SPX

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