Tesla Skeptic Surprised by How Much He Enjoyed the Model 3

(Bloomberg) -- Morgan Stanley analyst Adam Jonas, a former Tesla Inc. bull, took a spin in the new Model 3 and came away a little more positive about how quickly electric vehicles may catch on.

In a broader note about positive electric-car momentum, Jonas said he observed workers at Tesla’s lone auto plant in Fremont, California, who were “extremely busy cranking out Model 3s” for delivery in the U.S. He also drove the dual-motor performance version of the vehicle, which he sees as having better value-for-performance than the Model S sedan.

Tesla Skeptic Surprised by How Much He Enjoyed the Model 3

“Frankly, our enjoyment of the high-spec version of the Model 3 took us by surprise,” Jonas said, adding that it’s “hard to say how much this matters. But it matters.”

Jonas listed four other factors driving expectations for electric vehicles higher than what the market is pricing for now, including encouraging regulatory environments in China and Europe, rising oil prices and a consistent barrage of news about companies raising capital in the space.

Jonas has rated Tesla the equivalent of a hold since May 2017. In early October, he questioned the sustainability of strong delivery figures after the third-quarter results came in above estimates.

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