We think BMW have positioned themselves as tech leaders to out-rival premium peers such as Tesla, and investors will increasingly be willing to credit this leadership with higher multiples.”

Tesla Motors Inc showed the world that there is demand for a high quality, low energy vehicle, and now it has to face the consequences of its actions. The San Francisco-based company said its mass market car Gen III will require a third production line, and deliveries are expected to start in 2017. Tesla Motors Inc (NASDAQ:TSLA) said the Gen III car will have a base price of $35,000, but total ASP including options would run to $45,000-$50,000(just thinking out loud: could it be investors don't care for a discounted car price?  When you go from luxury to discount retailer, what's the reaction?  Add to the the negative cash flow from due to the cost of the third plant)

BMW is building something different from what Tesla Motors Inc (TSLA) is offering, and the changes its making to the manufacturing side of the business may be more revolutionary than the actual design of the i8. The use of lightweight materials in particular makes the future of the Tesla brand less than guaranteed.

The i3 serves a different market, and it’s been performing appreciably in its own right. Bayerische Motoren Werke AG (FRA:BMW) isn’t going to beat Tesla Motors Inc with a compact, however. The i8 is the German company’s key to a future ahead of the Californian auto company, and analysts reckon it will push the firm ahead of Elon Musk’s brainchild.

Full story @ Valuewalk

Full disclosure short TSLA via LEAPS

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