Tesla Motors (TSLA) was down more than 5% on Monday morning, following Friday's downbeat reaction to the Model D's unveiling late Thursday.
However, Credit Suisse's Daniel Galves is out defending Tesla and his $325 price target today. Galves and his team write that their confidence that Tesla will be "a disruptive force" is higher than ever, given the new features introduced last week and a series of meetings with management.
Highlights from their note:
Speed to market astounding: After just more than 1 year of development, Tesla has gone from no driver-assist technology to best-in-class. This, plus dual-motor, essentially makes initial Model S vehicles virtually obsolete only 2 years after launch. Additionally, dual motor all-wheel-drive intro is a proof-point that Model X is on-track and that it will be even more differentiated vs premium SUV competition than Model S is vs. premium sedans.
Capacity path on-track and recent actions should increase demand: Tesla is on-track to increase production capability to 150k+ annualized in 2H15 from 40k in 2Q14, which should drive major margin expansion in 2H15 (we see $7 per share of earnings power at 100k units in FY2016). Introduction of cutting-edge active safety technology, dual motor / all-wheel drive, and a consumer lease offering are all actions that we see as positives for near- and long-term demand and margin.
Increased confidence on battery cost reductions: The company is now openly talking about $150 / kwh as a reasonable estimate for 2017, which implies ~$7k per-unit for base Model 3 (very near cost parity with internal combustion powertrains) and a cost decrease of ~$6k/unit on Model S/X.
Over time, Galves believes that the inherent advantages of electric cars will lead to demand well ahead of Tesla's production capabilities and higher margins than those enjoyed by other luxury car makers.
No comments:
Post a Comment