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What Tesla Motors Inc (TSLA) Investor Thinks About Model 3’s Potential?

Despite missing quarterly results, Tesla Motors Inc (NASDAQ:TSLA)‘s stock has had a stellar performance in the past several years, mainly because Elon Musk managed to turn Tesla into an automotive industry disruptor. The company has taken the public by storm in the past week or so, in connection with the launch of its Model 3 vehicle, which is planned to be the cheapest at just $35,000 (excluding tax credits or incentives). If the delivery of the vehicle comes as planned, it will be Tesla’s first mass-produced electric vehicle and if the company manages to get the production and delivery to 500,000 vehicles a year by 2020, as it currently anticipates, it will convince the skeptics about the company’s potential and will establish Tesla Motors Inc (NASDAQ:TSLA) as an auto manufacturer, rather than a great technology company as it is perceived now by some investors.

Following the yesterday’s presentation of the car, Tesla Motors Inc (NASDAQ:TSLA) says more than 130,000 pre-orders have been put for the Model 3, which is expected by 2017. Now, the company is relying heavily on its Gigafactory that will be mass-producing batteries for the vehicles, which is currently under construction in Nevada in a partnership with Panasonic. In an yesterday intervention on CNBC, one of Tesla’s shareholders, Drew Cupps of Cupps Capital Management said that, despite the critique, Tesla has registered solid growth in the past and with the model 3, it will continue its growth for the years to come.

“[…] while people have certainly critiqued Tesla for being a quarterly, or for not hitting this number, or that number, when you take a step back, this is a company that has grown between 40% and 50% a year for, now, in their fourth year,” Cupps said.

The investor considers that the addition of the Model 3, as a new building block, will allow Tesla to grow further by 35% to 40% a year for the next five years.

“[…] So this is a truly extraordinary situation within the automotive landscape and execution doesn’t have to be perfect,” the investor added.

Cupps added that Tesla Motors Inc (NASDAQ:TSLA)’s Gigafactory is what makes the company different from other auto manufacturers. The factory shows that Tesla is thinking bigger and faster than the rest of the automotive industry, which is why the investor and his team are positive on the stock.

However, it’s important to point out that Cupps Capital trimmed its stake in Tesla by 61% during the fourth quarter and reported holding 17,591 shares in its 13F filing for the end of 2015. The fund initiated a stake in Tesla during the second quarter of 2010 and initially held some 105,360 shares of the company.

Head on to the next page, where we will discuss what some other investors think about Tesla and take a look at two other notable positions from Drew Cupps 13F portfolio.

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