Tesla Vehicle Analyst’s Report
There is no better way to learn about a vehicle company’s inner workings than to work on the production floor. George Gianarikas of Canaccord did precisely that when attempting to look inside a Tesla vehicle (NASDAQ:TSLA). When the analyst visited the Fremont factory, she was “mesmerized by the chaotic symphony of the production and employee morale.”
The fact that Tesla vehicle (NASDAQ:TSLA) was able to “push the boundaries” of what its first facility could produce, considering its small size compared to the company’s other facilities, has Gianarikas singing the EV leader’s praises.
The analyst further said that while macroeconomic factors and recent price increases can certainly impact order rates, we estimate Tesla’s EV momentum and competitive lead from manufacturing to materials procurement to autonomy has been secured for some time. He added that with additional offerings in solar, energy storage, and more to come, Tesla vehicle (NASDAQ:TSLA) remains the sustainability behemoth.
Gianarikas had previously asserted that Tesla’s “manufacturing excellence” is what sets it apart from its tech counterparts and other vehicle OEMs. When it comes to “ironing out peculiarities in constructing EVs versus ICE while handling a new supply chain reality,” Tesla Vehicle (NASDAQ:TSLA) is years ahead of its competitors. And Tesla vehicle (NASDAQ:TSLA) continues to push the edge; last quarter, Fremont increased its yearly capacity from 600,000 to 650,000, making it the country’s top auto manufacturing facility. However, the cost of manufacturing a vehicle has gone the opposite way; since 2017, it has decreased by almost 57%.
The analyst said to bear in mind that the cost of the battery pack has only declined marginally during that period, making this improvement mainly a function of enhanced design and process.
Furthermore, Gianarikas believes that manufacturing and process costs will decrease even further with the rollout of the robotaxi platform during the ensuing years. The production output will also likely increase significantly in the upcoming years. At the shareholder meeting last week, CEO Elon Musk stated his intention to construct 10–12 factories, each of which would have a 1.5–2 million car manufacturing capacity, for a total annual vehicle production capacity of about 20 million. By year’s end, a new site should be announced. Gianarikas now rates Tesla (NASDAQ:TSLA) stock as a Buy and has increased his price target from $815 to $881.
In general, the Street’s assessment of Tesla Vehicle (NASDAQ:TSLA) poses considerable difficulties. Based on 18 Buys, 6 Holds, and 7 Sells, the consensus rating for the stock is Moderate Buy. However, the $873.97 average price target suggests that shares will likely remain range-bound for some time.
Featured Image: Megapixl @Noblige
