NEW YORK (TheStreet) -- Oppenheimer managing director Colin Rusch appeared on CNBC's "Squawk Box" on Wednesday morning to talk about Tesla Motors (TSLA) - Get Report CEO Elon Musk's Tuesday announcement, that the electric vehicles manufacturer will launch new versions of its Model S sedan and Model X SUV.
The new models will have a more powerful 100 kilowatt hour battery to increase speed and will be the first electric cars to break the 300-mile range.
"I think the important story here is that they continue to evolve the product portfolio," Rusch said.
The company has introduced some incremental low-end vehicles in the last few months and now it's adding some features to the high-end vehicles for customers who want to add some additional speed to the vehicle, Rusch explained.
"The range is a positive but the speed is the things that most folks on that high end are really concerned with," he noted.
While the firm is "excited" about the auto platform at Tesla and think there's "significant operating leverage" there, it has a "perform" rating on the stock based on the company's transaction with energy company SolarCity (SCTY).
Oppenheimer is concerned by the news that Musk was buying a large portion of SolarCity bonds that were issued at a significant premium to previous issuances for similar securities, Rusch said. "I think there's some real concern around the relationship between SolarCity and Tesla and the return on equity for the Tesla investors here," he explained.
The firm is concerned by what seems like a lack of demand for those bonds, he added. "There's something there we're not real comfortable with," he said.
But the firm isn't willing to downgrade the stock to "sell" because its still thinks the company has "an enthusiastic investor base" and there's potential for "significant cash flow off the auto platform," he explained.
"Tesla may be robust enough to swallow the SolarCity platform without hurting the long-term prospects, but there's a lot of detail left to come in terms of the deal and the voters that have to get out and vote for this deal over the next three to six months," he concluded.
Shares of Telsa were lower in early afternoon trading on Wednesday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings team rates Tesla as a Sell with a ratings score of D+. This is driven by some concerns, which the team believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks the team covers.
You can view the full analysis from the report here: TSLA