Tesla Inc. (NASDAQ:TSLA)
Tesla Inc. (NASDAQ:TSLA) has gone from a Neutral rating to an Outperform one at KGI Securities. The firm has also lifted its price objective for Tesla stock from $300 to $335.00 in the next 12 months. Due to Tesla’s efforts in the United States, the Model 3 and Y now have the potential to get tax credits of up to $7,500.
After federal, state, and local incentives are applied, the Model 3 RWD’s pricing has dropped to $20-25k in some jurisdictions, making it comparable with popular ICE sedans, according to a report from KGI Securities. Panasonic has stated that it would increase its cell capacity at Tesla’s Gigafactory in Nevada by 10%, bringing the total number of battery cells produced to 4,680. Each battery cell produced in the United States is eligible for a US$35 production tax credit under the IRA. In comparison, each battery module is eligible for a US$10 production tax credit. Tesla and Panasonic may obtain a yearly production credit of more than US$5.0bn. Additionally, Ford (US) and GM (US) last week announced they will adopt Tesla’s charging plug standard, providing their EV customers with access to 12k Tesla fast chargers, in light of Tesla’s announcement that it is opening its supercharging network to non-Tesla EVs in 2024 as part of a US$7.5bn federal program. Supercharger use will increase Tesla’s income and profit by hastening the payback of the company’s substantial initial expenditures.
In addition, in a CNBC interview, Tesla’s CEO Elon Musk predicted that the company’s complete self-driving (FSD) system would soon have its own “ChatGPT moment.” This reflects his expectation that Tesla cars would reach full autonomy this year. This will be made feasible by adding to their already sizable (over 400k automobiles in the US) and rapidly increasing (internationally) testing fleet.
Eventually, as Tesla’s self-driving tech improves, more people will use its FSD function, leading to substantial revenue and profit increases over the next several years. When completely autonomous self-driving is included in the equation, Elon Musk believes the automobile industry’s profit margin would reach a high of 80%.
Both the 2024 and 2025 EPS forecasts from KGI Securities were increased. Tesla’s concentration on volume sales in a hard economic climate is projected to have a negative impact on the company’s profitability in the short term. Still, expert Liang predicts that the company’s earnings will recover strongly by 2025. Several variables, such as an increased software income, a road plan to lower manufacturing costs by 50%, government incentives, and an extended EV portfolio that includes the Cybertruck in the second half of 2023, will fuel this renaissance.
In Monday’s midday session, Tesla stock has up 1.02%.
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