Shares of electric vehicle company Tesla Motors, Inc. (NASDAQ:TSLA) fell during the second quarter, due to concerns over the Model X ramp and execution risk of its significant growth plan. The market also appeared skeptical of Tesla’s announced intent to buy Solar City. We believe Tesla’s brand is strong; the company’s S sedan and X crossover vehicles are unusually attractive; and its production of Model X is increasing. Further, Tesla has received over 370,000 reservations for the $35,000 – $40,000 Model 3 which represented nearly $18 billion in backlog. We are favorably inclined to the Tesla acquisition of Solar City but are still evaluating the transaction. (Gilad Shany)
Baron Focused Growth Fund second quarter 2016 commentary.
