Munster Expects Tesla's 'Bumpy Year' To Continue: 'This Story Remains Emotionally Charged'

On the second installment of the "Frontier Tech With Gene Munster" podcast, Loup Ventures founder Gene Munster and Benzinga PreMarket Prep co-host Joel Elconin discussed key issues pertaining to several of the most popular tech stocks in the market.

Tesla, Inc. TSLA exceeded expectations when it reported second-quarter deliveries earlier this month, but there is still plenty of concern on Wall Street that demand for Tesla’s vehicles will start to drop in the second half of the year. Munster said Tesla investors can expect the bumpy ride to continue.

Tesla's Demand Troubles

Munster said demand has been a negative for Tesla for a long time, and that the electric carmaker is always one quarter away from hitting a peak.

"The bottom line is this: this story remains emotionally charged … ultimately I think this is going to continue to be a bumpy year for the company, but I continue to believe that they will be one of the biggest beneficiaries of a shift to electrification, and you’ll see some stability in those delivery numbers starting next year," Munster said on the podcast.

Tesla's stock has bounced back over the past month, but it's still down about 28% year to date. The stock closed Wednesday at $238.92.

In the near term, Munster said the decline in EV credits starting July 1 shouldn’t have a major impact on demand. In the longer term, Munster said Tesla now has enough cash to support its operations through 2021.

See Also: Munster On Apple: 'Autonomy Is Going To Take Longer Than People Think'

Executive Departures

Munster is concerned about Tesla’s revolving door of executives in recent months, but it’s no reason for investors to panic.

“I am concerned about the brain drain. We’ve done our best to try to triangulate what the source of the brain drain is. It is a combination of factors."

Some of the executive losses are due to a "very intense environment" as Tesla struggles to become the first automaker to truly break the mold, he said.

"Also, there is a very frothy environment for these people to go and work other places too, and they can get paid and Tesla is tight on cash."

Listen to the full interview in the clip below: