After shares of Tesla (T) plummeted on a dismal earnings report, CEO Elon Musk announced on the company’s earnings call that co-founder J.B. Straubel will exit as chief technical officer. And while stock pressure indicated investor uneasiness in the C-suite shakeup, ARK Invest analyst Tasha Keeney says management moves are inevitable.
“J.B. Straubel is a big face of Tesla,” Keeney told Yahoo Finance’s The Ticker. “There’s been a lot of departures at Tesla, and we think the reason is Tesla is accomplishing the impossible, and it makes it not an easy place to work… It’s likely that — he’s been with the company since the beginning — that he feels like he set them up to do well in batteries.”
Keeney says Tesla’s battery technology far outpaces the competition. The company is building a battery and vehicle plant in Shanghai, China, where it is targeting production of 500,000 cars over the next 12 months.
“Tesla is set up to be a leader in the space,” Keeney says. “They’re three years ahead on battery technology. They’re three years ahead on autonomous data and autonomous hardware. So when we talk about the Tesla “killers,” we still think they’re years behind Tesla.”
And consumers are taking notice. In the U.S., Tesla sold 21,225 Model 3s in June. General Motors (GM) sold only 1,659 Chevy Bolts last month, according to InsideEVs.
But Musk has his sights set on more than just the standard EV. Speaking specifically on autonomy during the company’s earnings call, he said there is ‘significant margin potential’ for the existing fleet to upgrade to full self-driving.
“Tesla says they are going to become feature complete by the end of 2019 in autopilot and then in 2020 they would launch a taxi service. We think that will likely happen in 2021,” Kenney says. “They basically need a certain amount of miles to prove to regulators that they’re safer than humans.”
GM seems to be lagging behind Tesla in autonomy too. This week, Cruise, the General Motors-backed autonomous outfit, delayed plans to launch this year. Cruise’s CEO Dan Ammann said the company needs more miles of data.
“Who has those miles? Tesla,” Keeney says. “Tesla is very credible in this space because of their data advantage. They have more miles than any other player.”
And ARK Invest sees this advantage as a large driver of growth for Tesla stock.
“Our bull case? We think it can go north of $4,000 and up to $6,000 if things go well in the autonomous driving business,” Keeney says. “They have more scale than any other company right now and no one else is building an EV from the ground up besides Volkswagen.”
Meghan Fitzgerald is a producer with Yahoo Finance.
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