Predictably, when @elonmusk announced at Battery Day last week that $TSLA would cut the price of a Model 3 to $25,000, several financial analysts panicked, downgrading the stock and/or cutting their price targets. In our view, traditional financial analysts have missed the mark.

Traditional auto analysts are analyzing a mature industry in which lower prices signal trouble: higher inventories and lower sales. Led by #Tesla, electric vehicles (EVs) are in their infancy, and BECAUSE of lower costs and prices, are moving into exponential growth trajectory.

According to Wright’s Law, for every cumulative doubling in the number of EVs produced, costs will drop by 28%, suggesting that EV prices will drop below those of gas powered vehicles on a like-for-like basis during the next two years.

Analysts following $TSLA should be expert in energy storage, robotics, artificial intelligence, and software-as-service. While they are expert at the internal combustion engine, traditional auto analysts are not equipped to analyze EVs, particularly $TSLA.

According to @skorusARK’s battery research, #EV sales will scale nearly 20-fold from roughly 1.8 million last year to 35 million, 40% of total global auto sales, during the next five to six years.

The auto industry has not enjoyed exponential growth in roughly 100 years. EVs have entered exponential growth territory that will last for the next five to ten years.