Tesla Giga Texas Tour 'encouraged' Deutsche Bank

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Touring Tesla Giga Texas “encouraged” Deutsche Bank. According to them, the factory is designed thoughtfully and operates very efficiently. Observations showed that Giga Texas is making good progress in ramping up production and preparing for Cybertruck production.

Deutsche Bank reiterated a “buy”recommendation on Tesla stock and kept its 12-month price target at $200 after attending a tour of Giga Texas for investors. The firm also held meetings with the company's Head of IR, Martin Viecha, and Director, Travis Axelrod.

Deutsche Bank analysts were impressed with the factory, which they said is “well designed and runs very efficiently, and is clearly making good progress in ramping up both vehicles and battery cell volumes, and in installing tooling for Cybertruck,” according to investing.com.

Tesla said its new designs will result in lower costs with benefits such as reduced costs associated with initial factory setup, lower raw material prices, use of IRA credits, negotiations with suppliers, and component upgrades. The company also said conditions could become more challenging in the next 12 months. Nevertheless, Tesla is still committed to ramping up volumes as long as it generates positive free cash flow.

The analysts wrote in a note, “All in, we came away encouraged that Tesla could deliver cost improvements and efficiencies in the quarter ahead which may help offset some of the pressures, but we still worry the company may have to take additional price cuts in a weakening environment, which could put further pressure on earnings. Mid-term, Tesla confirmed that it is working on developing two new models on its next-gen platform and represent its highest priority at present. We are also encouraged by the targeted combined unit volume of 5 million and we remain bullish on the opportunity presented within the next-gen platform.”

© 2023, Eva Fox | Tesmanian. All rights reserved.

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