Game Changer: Comparing Elon Musk's Tesla Model 3 with Henry Ford's iconic Model T
Although Tesla Motors [NASDAQ: TSLA] is facing some headwinds from the fossil fuel establishment and Big Auto, it appears some very powerful players in the finance world have stepped up to give the company some support. In fact, there are flattering comparisons between Elon Musk's Model 3 and Henry Ford's Model T that are especially fitting. We'll get to that in a moment. But first, The Street confirms that: "Goldman [Sachs] analyst Patrick Archambault on Tuesday upgraded the Bay area automaker [Tesla] to a buy, seeing a 22% upside to its $250 share price target.... [and George] Soros, in his latest 13F filing, disclosed the purchase of about $2.15 million worth of convertible notes."
A TSLA investment by Soros signifies a notable vote of confidence as he's listed as, "the world's richest hedge-fund manager, and 7th on its list of the 400 wealthiest Americans, with a net worth estimated at $23 billion." In addition, Goldman's research note on TSLA (reported on Zero Hedge*) explains, "we do not believe Tesla shares are fully capturing the company’s disruptive potential." So that said... where's the connection between Elon Musk and Henry Ford? Check out Goldman's TSLA valuation summary below.
In the chart above, Goldman assumes Tesla CEO Elon Musk as Steve Jobs, as Henry Ford, or as the Maytag repairman. Although we must admit: Musk as a Maytag repairman is quite a stretch. Nevertheless, it appears Goldman could be leaning towards potential for Musk to mirror a Henry Ford type of figure as its report also included another chart (see below) comparing Tesla's estimated production ramp to that of Henry Ford's Model T almost 100 years ago.
This comparison has been made before as well. In fact, Bloomberg Business wrote a fascinating article on this before the Model 3 had even launched claiming, "Of course, this isn't the first time Musk has been compared to Ford, but the parallel in the production data is striking. Tesla first surpassed 10,000 deliveries in 2013—the same milestone Ford hit in 1909. By 1916—just seven years later—the Model T hit Musk’s goal right on schedule and produced 501,462 cars. Maybe the 2020 plan isn't out reach for Tesla." Note: Musk has moved that plan forward by two years to 2018 and Goldman's chart (above) adjusts the data points assuming both the base case and average upside case scenarios for Musk's new targets.
Youtube: Bloomberg; Note: Data presented in video was before the Model 3 launched
In addition, it seems that Henry Payne of the Detroit News agrees claiming that the Tesla Model 3 is, "the most intriguing auto story since the Model T, and Elon Musk is the boldest American auto entrepreneur since Henry Ford... [and] like Ford, Musk’s big, risky bets have made him an instant American folk hero." Payne concludes: "With the resulting volume [from Model 3 pre-orders]... the Model 3 & Co. will likely change energy infrastructure just as the Model T did."
*Source: Zero Hedge