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It's looking less and less likely that Tesla will find a buyer to save it from its financial struggles and offer it a source of new funding, Bernstein told clients on Monday.
European autos analyst Max Warburton wrote in a note that while Volkswagen's CEO may take a look, there really wouldn't be much support for a bid to acquire any of Tesla's assets.
"What assets are attractive? Tesla no longer has genuinely differentiated tech. The production plant is sub-par. The Gigafactory is probably not essential (and may be claimed by Panasonic)," Warburton wrote. "The brand still has value, albeit one that is declining fast. The Supercharger network also has some value. Perhaps these get picked up. But at what price?"
"We struggle to see it being sold as a going concern," he added.
Tesla used about $950 million of cash in the first quarter (for a combined $5 billion of cash burn since 2017), prompting renewed concerns over its long-term financial health. A few weeks ago, Tesla managed to raise $2.35 billion in new capital, with $750 million of common stock and $1.6 billion from convertible bonds. Others have suggested that another technology company, like Apple, could swoop in and buy Tesla when its assets cheapen.
Roth Capital Partners analyst Craig Irwin told CNBC last month that the electric car company could have sold to Apple six years ago at $240 per share. The stock is down 48% over the last six months at $185.16 a share.
Even though Warburton isn't Bernstein's Tesla analyst, he does cover a number of European auto companies that could be in for a pop if Tesla fails. The Palo Alto, California-based automaker has put "huge pressure" on the valuations of traditional equipment manufacturers in Europe as Tesla's initial success suggested that the barriers to entry in the electric vehicle market weren't as onerous as once thought.
"Its technology seemed ahead of all other OEMs — damaging the Germans' relative brand position. Tesla took market share from the German OEMs in the US, UK and some other regions," Warburton wrote.
But "financial failure of Tesla would force a change in investors' views of traditional OEMs. It would show how difficult it is for a new entrant to succeed," he added. "Most important: it would change views on the size and growth rates of the EV market."
Bernstein's main Tesla analyst, Toni Sacconaghi, has a market weight rating on shares of Tesla.