Oppenheimer analysts have previewed the upcoming Tesla Battery Day and reiterate TSLA target price at $451 per share (12-18 months PT).
Oppenheimer writes that the $451 price tag is based on 40x of 2025 EPS of $13.93, discounted two years at 10%. The firm believes this ratio is appropriate given TSLA's position as a leader in electric vehicles and advanced driver assistance system (ADAS) functionality, which is disrupting the transportation market.
Ahead of Battery Day, Oppenheimer sees four key areas of focus: anode and cathode material design, manufacturing process tech, leverage of the battery management system into powertrain optimization, and its path to solid state batteries, especially its electrolyte development approach. The firm is also expecting an evolution of Tesla's main geometry for its cells showing wider diameters and not a move to prismatic cells. Oppenheimer writes that they expect an update on its relationships with cell partners like Panasonic and CATL. Given the scale of the opportunity in both vehicle and stationary power, expect Tesla to continue working closely with a few battery suppliers to scale production with key steps remaining in the company's facilities.
Oppenheimer believes Tesla has been experimenting and testing materials for well over a decade and that the organization's IP related to material behavior under the harsh conditions of a car battery is a defensible advantage. They expect to hear the company discuss silicon and lithium doping, innovation from an electrolyte perspective, and potentially new composite materials that extend the cell lifecycle and improve power density.
Furthermore, the analysts believe the 2019 acquisition of Maxwell Technologies was a crucial enabler of Tesla’s roadmap. With the increasing complexity of lattice structures for anodes and cathodes, the dry electrode process that Maxwell developed not only eliminates dryers and reduces production cycle times, but it also facilitates the volume production of new composites.
Oppenheimer believes Tesla leverages a deep understanding of battery cycling and cooling patterns into optimal powertrain performance. And the firm believes that integration of the battery management system with powertrain controls is a key area of differentiation for the company. They note that Tesla has continued to work on 400V platforms and are watching for potential changes to the underlying architecture, particularly related to its truck platforms.
With solid state competitors targeting solid state power density above 400W / kg, Oppenheimer expects Tesla to give its anticipated time for reaching such levels.
The firm anticipates Tesla will continue its approach to scaling capacity by working closely on cell design and process technology with its partners.
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