Tesla is overvalued, says Danish environmental investment fund
Copenhagen-based Nordea Global Climate and Environmental Fund has taken a negative view of electric vehicle manufacturer Tesla's prospects, saying that the firm is overvalued and it saw no upside. "What's needed in cash flow generation to get to the current valuation. We don't see that happening," said fund manager Thomas Sorensen. Instead, he said the fund, which has outperformed 97% of its peers over the past five years, was focusing on "mid-cap companies with a unique solution, unique product that can be taken global. That's our sweet spot." Tesla's share price has risen by 60% this year.

Tesla is overvalued, according to a climate fund that has beaten 97 percent of its peers.

"We don't see upside," Thomas Sorensen, who manages the Nordea Global Climate and Environmental Fund, said by phone on Thursday. "What's needed in cash flow generation to get to the current valuation -- we don't see that happening."

With more and more climate-friendly products and services coming to market, investors are having a hard time valuing new technology. Tesla's 60 percent share rise so far this year is testament to investor enthusiasm even as it reported losses in both the first and second quarter.

"We don't see upside," Thomas Sorensen, who manages the Nordea Global Climate and Environmental Fund. AP

But the turmoil created by the electric car's rise that roiled traditional carmakers now means greater risk for all manufacturers.

"It's going to be a race to the bottom for the whole industry," he said. "In this big transition period, it's very tough to point out the winners and the overall profitability of the sector. The risks are too high."