Owuraka Koni part of an elite group on Wall Street: those who already knew Tesla Inc.’s wild growth potential even before it went public.
Cooney was only 25 when he came across a budding electric-vehicle maker while researching other companies for Jennison Associates. He was immediately infatuated with Tesla’s approach and by age 27 had managed to persuade his colleagues at Jennison to gamble on the stock.
A dozen years and about 14,800% later, Connie Not satisfied. He still sees plenty of room for additional profit as the company will release a “tsunami” of new cars in the coming years. At the same time, he expects the auto industry to undergo massive integration as it challenges the transition away from combustion engines.
Cooney spoke publicly for the first time about how Jennison took a $5.9 billion position in Tesla, saying the Elon Musk-led company had already built EV expertise and improved its products, Thereby making himself one of the survivors. Cooney believes that by 2026, Tesla could double that to 2 million or more cars delivered this year. That would set it up for further growth, even though the dreamy notion of fully self-driving cars is still years away.
“They are mostly a car company today. That’s what drives most of their revenue,” Cooney said. “That’s going to be the case a few years from now.”
When Tesla posts quarterly earnings on Wednesday, Coney won’t be particularly worried about the company’s continued volatility. The results will be a barometer for how well the series of price cuts is working in an increasingly crowded market, in which both older automakers and startups continue to offer alternatives to the Model 3 and Model Y, Tesla’s two workhorse vehicles. Are.
Cooney said he is looking more forward to three years from now, when he expects the next generation of Tesla cars to roll off the newly built assembly line in Mexico. He sees those models being made cheaply in high volumes, making investors like Jennison second in line musk unexpected profit
meeting places
When Cooney first encountered Tesla, he had no real background in the auto industry. He was born in Ghana and spent part of his childhood in The Gambia. His father was a judge and his mother worked for Ghana Airways. After studying economics and political science at Williams College, he got his first job in finance at UBS Group AG as an aerospace analyst.
Jennison, an affiliate manager of PGIM with approximately $175 billion under management, hired Cooney in 2007 to cover the industrial sector. Two years later, the analyst embarked on a nationwide tour of the EV ecosystem to understand why one of the companies he follows, Johnson Controls Inc., was considering building a lithium-ion battery business. One of the startups he visited impressed him so much that he started building an entirely new investment idea.
When Cooney met Tesla at his retail store in Silicon Valley, Deepak Ahuja, Tesla’s then chief financial officer, said the company would first enter the high-end market, where consumers are willing to pay a premium for an EV. They would then bring the down to market as quickly as possible, increasing volumes and lowering the price of each successive model.
Kony made rapid progress, but Tesla still faced many risks. As the company went from strength to strength, he kept a close eye on it. In April 2010, the carmaker received a $465 million loan at low interest from the US Department of Energy – a lifeline as it was making the Model S. A month later, Tesla bought a shuttered factory that had once been owned by a joint venture between General Motors and Tesla Motors. Toyota Motor Corp. That June, Tesla went public at $17 per share, valuing the company at approximately $1.7 billion.
Koni met with more executives, including its then chief technology officer, JB Straubel, and its chief designer, Franz von Holzhausen. By 2011, convinced that Tesla was “really in”, it was time for him to push Jennison forward on the idea.
“Owuraka believed that Tesla was going to revolutionize the auto industry,” said Kathleen MacRaagher, head of growth equity at Jennison. “He had a keen understanding of the importance of Tesla’s competitive advantages.”
One of the factors Cooney highlighted to the team was that Tesla had built its own battery system, had structural cost advantages compared to traditional automakers and had a “unique company culture that could create innovative solutions,” McCaragher said. he said.
Jennison owns more than 20 million Tesla shares, making it one of the company’s largest investors. The asset manager declined to say how profitable its Tesla bet has been over the past few years, citing compliance issues. The stock is up more than 135% in 2023 and is up 14,853% since mid-2011, when Jennison first disclosed its initial shareholding in a regulatory filing.
high volatility
For nearly a dozen years, Cooney has weathered waves of stomach-churning volatility, an experience similar to that of another company he saw as a potential giant early in his time at Jennison: Netflix Inc. Few stocks are as polarizing as Tesla, and each day begins with absorbing the news flow, checking Reddit, and “being aggressively stealthy” on Twitter.
Some of the volatility has been initiated by Musk himself, and behind the scenes Coney has found himself at odds with the multibillionaire.
In 2016, Tesla was looking to acquire SolarCity, a rooftop solar-panel installer run by Musk’s cousins. Some investors disagreed: Tesla was working on its first mass-market car, the Model 3, and the deal seemed to come at the wrong time.
As Tesla lobbied shareholders for support, the company arranged a phone conversation between Kony and Musk. The analyst was on his way home to his newborn daughter when the call came from the CEO. As Connie came to the door, her mother, who was helping with the babysitting, woke up and told her that “this guy named Elon” was on the phone.
Shareholders overwhelmingly support SolarCity deal; Jennison voted against it. Solar still isn’t a big part of Tesla’s energy business, where most of the excitement is focused on the company’s Megapack batteries for utilities.
Cooney said, “I was not a fan of that deal, and I still am not.” “I like Elon. But I’m not really a fanboy. We don’t just sign everything.
By 2018, Tesla was in a manufacturing ramp-up period, so tax and capital intensive, Musk called it “production hell”. According to the CEO’s retelling, the company was weeks away from bankruptcy, and key executives quit.
That was also the year Musk infamously tweeted that he was considering taking Tesla private at $420, and had “secured funding”. Cooney sent an email to Tesla and was eventually overruled by investors who sued Musk in federal court (the transcript of the analyst’s statement is sealed).
The beginning of 2019 was equally rough: Tesla closed stores and missed delivery targets, and Ahuja was gone. But Cooney sees the second quarter of the year as a turning point: Tesla turned cash-flow positive, proving it could build the Model 3 and make money. It is the only US company with a profitable EV business still.
Tesla is not immune to risks. The company itself says it relies heavily on Musk, who is also the CEO of Space Exploration Technologies Corp. In October, he acquired Twitter Inc. for $44 billion. This month, he announced the leadership team for his latest startup, xAI.
Cooney said, “Elon is a big driver of Tesla’s success.” “The less time he spends on Twitter and the more time he spends on Tesla, I’m happy.”
full self-driving
In March, Tesla gave a lengthy investor presentation at the company’s headquarters and factory in Austin, and Musk shared the stage with several other executives. Cooney was there in person and was paying close attention to the more than 160 slides shown by Tesla.
Aside from the breadth of executive talent, Koni’s greatest achievement was the “unboxed” assembly process, highlighted by Lars Morawi, Tesla’s vice president of vehicle engineering. The company will move away from the complex and cumbersome methods the industry has used for more than a century, eliminating hundreds of parts and simplifying assembly processes, he said. Cooney believes that Optimus, Tesla’s humanoid robot, could eventually be put to work on production lines to install seats and interior panels.
That could drive down costs, which will be especially helpful as Musk cuts prices on Tesla models to keep up with growing sales as other carmakers release a wave of competing electric vehicles.
While those cuts will put pressure on profit margins, Musk has said the company could make so much money on future autonomous-driving software it doesn’t need to make upfront returns on vehicle sales. The CEO has long made tall claims about AI-powered cars that haven’t materialized.
Cooney believes that the full self-driving beta — the name for Tesla’s driver-assistance software — is slowly getting better, and requires less input from the driver. He should know: He has a Model X with the FSD Beta and regularly drives it in Manhattan.
“It’s extremely cautious around pedestrians, which it should be,” Cooney said. “There are many ways to go before FSD will work in a city like New York, let alone a place like Mumbai.”
More promising for Cooney is the fact that Tesla is building a new factory in Mexico that will make its next generation of cars.
Although details are scant — the vehicles were hidden under white sheets during its investor day — Tesla expects them to be winning products. The company wants to make 20 million vehicles per year by 2030 and will need cheaper, higher-volume models to reach there.
It’s a far cry from 2009, when Cooney was upbeat about the budding EV maker but most of Wall Street questioned whether the company was viable.
Connie said, “When I look at Tesla today, I don’t worry about survival.” “It’s just a question of how successful they will be.”
Cooney was only 25 when he came across a budding electric-vehicle maker while researching other companies for Jennison Associates. He was immediately infatuated with Tesla’s approach and by age 27 had managed to persuade his colleagues at Jennison to gamble on the stock.
A dozen years and about 14,800% later, Connie Not satisfied. He still sees plenty of room for additional profit as the company will release a “tsunami” of new cars in the coming years. At the same time, he expects the auto industry to undergo massive integration as it challenges the transition away from combustion engines.
Cooney spoke publicly for the first time about how Jennison took a $5.9 billion position in Tesla, saying the Elon Musk-led company had already built EV expertise and improved its products, Thereby making himself one of the survivors. Cooney believes that by 2026, Tesla could double that to 2 million or more cars delivered this year. That would set it up for further growth, even though the dreamy notion of fully self-driving cars is still years away.
“They are mostly a car company today. That’s what drives most of their revenue,” Cooney said. “That’s going to be the case a few years from now.”
When Tesla posts quarterly earnings on Wednesday, Coney won’t be particularly worried about the company’s continued volatility. The results will be a barometer for how well the series of price cuts is working in an increasingly crowded market, in which both older automakers and startups continue to offer alternatives to the Model 3 and Model Y, Tesla’s two workhorse vehicles. Are.
Cooney said he is looking more forward to three years from now, when he expects the next generation of Tesla cars to roll off the newly built assembly line in Mexico. He sees those models being made cheaply in high volumes, making investors like Jennison second in line musk unexpected profit
meeting places
When Cooney first encountered Tesla, he had no real background in the auto industry. He was born in Ghana and spent part of his childhood in The Gambia. His father was a judge and his mother worked for Ghana Airways. After studying economics and political science at Williams College, he got his first job in finance at UBS Group AG as an aerospace analyst.
Jennison, an affiliate manager of PGIM with approximately $175 billion under management, hired Cooney in 2007 to cover the industrial sector. Two years later, the analyst embarked on a nationwide tour of the EV ecosystem to understand why one of the companies he follows, Johnson Controls Inc., was considering building a lithium-ion battery business. One of the startups he visited impressed him so much that he started building an entirely new investment idea.
When Cooney met Tesla at his retail store in Silicon Valley, Deepak Ahuja, Tesla’s then chief financial officer, said the company would first enter the high-end market, where consumers are willing to pay a premium for an EV. They would then bring the down to market as quickly as possible, increasing volumes and lowering the price of each successive model.
Kony made rapid progress, but Tesla still faced many risks. As the company went from strength to strength, he kept a close eye on it. In April 2010, the carmaker received a $465 million loan at low interest from the US Department of Energy – a lifeline as it was making the Model S. A month later, Tesla bought a shuttered factory that had once been owned by a joint venture between General Motors and Tesla Motors. Toyota Motor Corp. That June, Tesla went public at $17 per share, valuing the company at approximately $1.7 billion.
Koni met with more executives, including its then chief technology officer, JB Straubel, and its chief designer, Franz von Holzhausen. By 2011, convinced that Tesla was “really in”, it was time for him to push Jennison forward on the idea.
“Owuraka believed that Tesla was going to revolutionize the auto industry,” said Kathleen MacRaagher, head of growth equity at Jennison. “He had a keen understanding of the importance of Tesla’s competitive advantages.”
One of the factors Cooney highlighted to the team was that Tesla had built its own battery system, had structural cost advantages compared to traditional automakers and had a “unique company culture that could create innovative solutions,” McCaragher said. he said.
Jennison owns more than 20 million Tesla shares, making it one of the company’s largest investors. The asset manager declined to say how profitable its Tesla bet has been over the past few years, citing compliance issues. The stock is up more than 135% in 2023 and is up 14,853% since mid-2011, when Jennison first disclosed its initial shareholding in a regulatory filing.
high volatility
For nearly a dozen years, Cooney has weathered waves of stomach-churning volatility, an experience similar to that of another company he saw as a potential giant early in his time at Jennison: Netflix Inc. Few stocks are as polarizing as Tesla, and each day begins with absorbing the news flow, checking Reddit, and “being aggressively stealthy” on Twitter.
Some of the volatility has been initiated by Musk himself, and behind the scenes Coney has found himself at odds with the multibillionaire.
In 2016, Tesla was looking to acquire SolarCity, a rooftop solar-panel installer run by Musk’s cousins. Some investors disagreed: Tesla was working on its first mass-market car, the Model 3, and the deal seemed to come at the wrong time.
As Tesla lobbied shareholders for support, the company arranged a phone conversation between Kony and Musk. The analyst was on his way home to his newborn daughter when the call came from the CEO. As Connie came to the door, her mother, who was helping with the babysitting, woke up and told her that “this guy named Elon” was on the phone.
Shareholders overwhelmingly support SolarCity deal; Jennison voted against it. Solar still isn’t a big part of Tesla’s energy business, where most of the excitement is focused on the company’s Megapack batteries for utilities.
Cooney said, “I was not a fan of that deal, and I still am not.” “I like Elon. But I’m not really a fanboy. We don’t just sign everything.
By 2018, Tesla was in a manufacturing ramp-up period, so tax and capital intensive, Musk called it “production hell”. According to the CEO’s retelling, the company was weeks away from bankruptcy, and key executives quit.
That was also the year Musk infamously tweeted that he was considering taking Tesla private at $420, and had “secured funding”. Cooney sent an email to Tesla and was eventually overruled by investors who sued Musk in federal court (the transcript of the analyst’s statement is sealed).
The beginning of 2019 was equally rough: Tesla closed stores and missed delivery targets, and Ahuja was gone. But Cooney sees the second quarter of the year as a turning point: Tesla turned cash-flow positive, proving it could build the Model 3 and make money. It is the only US company with a profitable EV business still.
Tesla is not immune to risks. The company itself says it relies heavily on Musk, who is also the CEO of Space Exploration Technologies Corp. In October, he acquired Twitter Inc. for $44 billion. This month, he announced the leadership team for his latest startup, xAI.
Cooney said, “Elon is a big driver of Tesla’s success.” “The less time he spends on Twitter and the more time he spends on Tesla, I’m happy.”
full self-driving
In March, Tesla gave a lengthy investor presentation at the company’s headquarters and factory in Austin, and Musk shared the stage with several other executives. Cooney was there in person and was paying close attention to the more than 160 slides shown by Tesla.
Aside from the breadth of executive talent, Koni’s greatest achievement was the “unboxed” assembly process, highlighted by Lars Morawi, Tesla’s vice president of vehicle engineering. The company will move away from the complex and cumbersome methods the industry has used for more than a century, eliminating hundreds of parts and simplifying assembly processes, he said. Cooney believes that Optimus, Tesla’s humanoid robot, could eventually be put to work on production lines to install seats and interior panels.
That could drive down costs, which will be especially helpful as Musk cuts prices on Tesla models to keep up with growing sales as other carmakers release a wave of competing electric vehicles.
While those cuts will put pressure on profit margins, Musk has said the company could make so much money on future autonomous-driving software it doesn’t need to make upfront returns on vehicle sales. The CEO has long made tall claims about AI-powered cars that haven’t materialized.
Cooney believes that the full self-driving beta — the name for Tesla’s driver-assistance software — is slowly getting better, and requires less input from the driver. He should know: He has a Model X with the FSD Beta and regularly drives it in Manhattan.
“It’s extremely cautious around pedestrians, which it should be,” Cooney said. “There are many ways to go before FSD will work in a city like New York, let alone a place like Mumbai.”
More promising for Cooney is the fact that Tesla is building a new factory in Mexico that will make its next generation of cars.
Although details are scant — the vehicles were hidden under white sheets during its investor day — Tesla expects them to be winning products. The company wants to make 20 million vehicles per year by 2030 and will need cheaper, higher-volume models to reach there.
It’s a far cry from 2009, when Cooney was upbeat about the budding EV maker but most of Wall Street questioned whether the company was viable.
Connie said, “When I look at Tesla today, I don’t worry about survival.” “It’s just a question of how successful they will be.”