Wedbush’s Daniel Ives said Tesla is now an automotive disruptive technology and among competitors, General Motors Corp. (NYSE:GM) and Ford Motor Co. (NYSE:F) are the biggest shadows for the Elon Musk-led company.
Weighing in on the impact of the UAW strike in terms of cost intake and EV production in 2024, the analyst said it’s almost a moment to “champagne on ice” for Tesla. “The competition barks a lot worse than fighting the UAW,” he said.
The impact of the strike depends on how it is settled, Ives said. If the cost intake is settled at 40% and some of the pension and other things the union proposed are accepted, then the business models of the legacy automakers are at risk, he said.
The non-unionized Tesla is watching this debacle from its view and competition-wise this is the biggest risk, Ives.
“Anyone who says this is a boon for Tesla has a gross misunderstanding of the auto market and why the workers are striking,” said GLJ Research’s Gordon Johnson. “Right now, there are about 2.01 million cars in inventory in the U.S., which is the highest level of inventory since April 2021.”
Johnson said the automakers have 43 days of inventories, i.e. 43 days for the strike to get resolved. The idea that the strike is going to cause a shortage of cars is misplaced, he said.
The bearish analyst also highlighted another looming risk for Tesla. The proxy statements of GM and Ford showed a worker at Ford makes $75,000 a year and an average worker at GM makes $80,000. While a worker at Tesla makes only $34,000, he noted.
Even before a resolution to the strike, Tesla workers are grossly underpaid, Johnson said. The White House and the UAW will likely come after Tesla next, he said.
In premarket trading, Tesla shares rose 0.42% to $256.76, in premarket trading. GM edged down 0.03% to $32.70 and Ford slipped 0.16% to $12.18.
Produced in association with Benzinga
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