A Jefferies analyst visited Tesla Giga Berlin and expects the company to reduce production costs soon. In addition, the manufacturer can benefit from the Inflation Reduction Act, he believes.
The Jefferies analyst has adjusted his Tesla (NASDAQ: TSLA) price target to reflect the company's recent 3:1 stock split. The company's new 12-month target price is $350, equal to $1,050, the same as it was before the split. Tesla's share price at the time of this writing is $290. The analyst said he spent the whole day at investor meetings in Giga Berlin, where he met with the head of Tesla's investor relations, Martin Viecha, according to investing.com.
During the meetings, Viecha focused on explaining how Tesla plans to increase capacity and further reduce unit costs. He said the boost to Giga Berlin and Giga Texas would be the basis for lowering higher costs. The Jefferies analyst came to the following conclusions:
“Tesla expects a further step down in costs from a new platform in 2024, likely a robotaxi given recent comments from CEO Musk, although we understand some flexibility on product concept. Inflation Reduction Act wording leaves room for interpretation but should enable bigger contributions to lower battery cost/kwh up to $45.”
In addition, the analyst believes that higher vertical battery integration is giving Tesla an edge in localizing material sourcing and processing to qualify for cost incentives while sales incentives extend to corporate buyers.
At the moment, it is officially known that Giga Berlin and Giga Texas have reached a production capacity of 1,000 Model Ys per week. However, Giga Berlin sources say the factory is producing between 1,600 and 1,900 vehicles a week, significantly more than is officially known. It is reported that the production capacity of 2,000 Model Ys per week is expected by September. At the moment the German factory works in two shifts, five days a week. By the end of 2022/beginning of 2023, Giga Berlin and Giga Texas should reach a production capacity of 5,000 vehicles per week.
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Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.