2 Areas Where Tesla's Technology Is In A League Of Its Own, According To Gene Munster

Loup Ventures founder Gene Munster and PreMarket Prep co-host Joel Elconin in May taped their inaugural "Frontier Tech With Gene Munster" podcast. The two talked about several companies on the frontier of today’s technology industry. One of the stocks Munster discussed is electric vehicle maker Tesla, Inc. TSLA.

Brutal Year

Tesla and its investors have had a brutal 2019, with shares down 43 percent in the past six months. Munster said that despite the company’s struggles, he would still give the stock an Outperform rating.

“I would have it with a caveat that this is for people who can invest more than a year, and I’ve been using that backdrop more recently that 2019 is going to be a troubled year for Tesla. But ultimately what they’re building is going to be foundational to the future of transportation,” Munster said on the podcast, which was taped May 22.

In the near term, Munster said Tesla shares may still have additional downside.

“The reason why the stock has dipped back to 2016 levels is investors don’t have any visibility to what the underlying demand for the Model 3 and S/X are going to be this year,” he said.

See Also: Munster Talks Uber, Lyft On 'Frontier Tech' Podcast

A League Of Its Own

Tesla bears often talk about a wave of coming competition in the EV space, but Munster said there are two areas in which Tesla’s technology is in a league of its own.

“One is the battery performance, and this is critical because range anxiety is something that prevents people from buying electric cars,” he said.

Tesla’s battery performance is consistently 40 percent to 60 percent better than competitors, according to Munster.

“The second is the manufacturing process, which has been held up as a pain point for Tesla, and undoubtedly it has been painful. But everything they’re doing is shifting the manufacturing from a traditional car to really a computer on wheels,” Munster said.

Over time, Munster said these superior technologies will be more reflected in Tesla’s valuation.

Listen to the entire podcast in the clip below: