Analysts are confident in Tesla's (NASDAQ: TSLA) strong growth prospects in the future, despite the decline in Q2 2022. The manufacturer's delivery cut was expected, as Elon Musk explained the reasons for this in advance.

Tesla bulls were not afraid of a decline in production and deliveries in Q2 2022, as they expected it. Tesla CEO Elon Musk, during the quarter, repeatedly spoke about this and explained the logical reasons. Analysts expect the manufacturer to fully recover before the end of the year, while Giga Berlin and Giga Texas will increase their productivity to support growth.

Oppenheimer has an Outperform rating and a $1,291 price target. The firm said it remains bullish on Tesla as it factored in earnings leverage, the company's tech leadership position, and the recent share price slide. Analyst Colin Rusch wrote that production and delivery numbers were in line with Wall Street's adjusted expectations, because they knew all headwinds in advance, thanks to Musk's explanations.

“With TSLA 2Q22 deliveries/production largely in line with adjusted Street expectations after CEO Elon Musk publicly discussed supply chain and ramp headwinds as a strain on cash flow, we expect investors to focus on production run rate and pricing dynamics short term as key drivers of Revenue and GM under normalized operating conditions.”

The firm believes that the current issues will be largely resolved by Q4, however they will not be surprised by some pressure on margins in the near future. Oppenheimer is looking for attached rates on FSD for new buyers in the future. In addition, it expects Tesla to roll out new feature sets as they believe the competition for autonomy is starting to heat up.

Wedbush Securities has an Outperform rating and a price target of $1,000. The firm also believes that the market will focus on Tesla's future growth trajectory. Analyst Dan Ives believes that macro indicators will affect demand in the coming quarters, but the company has sufficient demand potential to reach about 2 million units in 2023. He is also confident that, taking into account the performance of Giga Berlin and Giga Texas, Tesla's production will exceed this number.

“While the softer macro will clearly impact demand around the edges the coming quarters, we believe Tesla has ample demand capacity to hit ~2 million units in 2023 globally with production capacity that can exceed this number when factoring in Austin and Berlin to a normalized China production target.”

Goldman Sachs has a Buy rating and a price target of $1,000. The firm believes the record production that Tesla posted in June is a sign that Giga Shanghai is picking up again, with Giga Texas and Giga Berlin seeing more progress.

Deutsche Bank has a Buy rating and a price target of $1,125. The firm expects a sharp recovery in Tesla shares in the second half of the year. Analyst Emmanuel Rosner believes that this will happen due to the growth of production at new factories in the US and Germany, the production of new technologies, and cost leadership.

“Overall, we believe the company's strong and accelerating growth profile – through new factory ramps, its widening technology (battery cells) and cost leadership – should support the above-average valuation.”

© 2022, Eva Fox | Tesmanian. All rights reserved.

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