Gigafabrik’s leadership convinces analysts: Tesla shares have potential

taketonews

• Analysts invited to Gigafabrik Berlin
• Experts optimistic afterwards
• Bullish view on Tesla stock

Electric car maker Tesla has invited a number of analysts to visit its production facility in Berlin. Among the participants were experts from Jefferies, New Street Research and UBS, as well as Deutsche Bank analyst Emmanuel Rosner. All of them were impressed after the event.

$10 trillion valuation ahead

As part of the event, the experts were able to test drive the Model Y Performance and get to know the company’s head of IR, Martin Viecha. For Pierre Ferragu from New Street Research, this was apparently a drastic experience, as Viecha tweeted after the meeting: “After driving the Model Y Performance, he says to me: Martin, it’s built like a German premium car! I say: Pierre , this IS a premium German car,” said the Tesla executive.

After the visit, Ferragu himself formulated a financial assessment of his visit to the Gigafactory. In this he emphasized in particular the efficiency of the production facility. In a note to customers, he spoke of “unprecedented demand” and also believes that the company will be valued at $10 trillion with production of 20 million vehicles by 2030. With a price target of 530 US dollars, Ferragu is well ahead in analyst circles: Tesla shares are currently trading at around 275 US dollars.

Jefferies analyst adjusts price target for Tesla shares

Philippe Houchois, who works as a Tesla analyst at Jefferies, was also bullish on the electric car manufacturer after visiting the Gigafactory in Berlin and also adjusted his price target for Tesla shares to $350. The company is leading the transformation in the industry, it said in a customer release.

Houchois also commented on ramping up production at the Berlin Gigafactory. Due to the lower complexity and fewer model variants, the production facility is more productive than the Fremont plant, according to Twitter excerpts from the customer message.

UBS also bullish on Tesla

After the visit to Berlin, UBS was also optimistic. “Tesla emphasized that Berlin could become the most profitable gigafactory as COGS will approach the level of Shanghai (i.e. much better than Fremont), while the European product mix will be the highest in the world, much higher than China. We agree with this assessment which is why we expect automotive gross margin to exceed 30% as of H2/22.” In part, the factory is already geared towards 10,000 vehicles per week, the UBS statement is quoted on Twitter as saying:

Deutsche Bank analyst sees Gigafabrik as a “game changer”

Emanuel Rosner, analyst at Deutsche Bank, was also bullish on Tesla after the event. The expert confirmed his price target of 375 US dollars.

After the investors’ meeting, the impression was gained that the electric vehicle manufacturer’s “new localized vehicle production in Europe could be a game changer that could make Tesla an even stronger competitor in the region”, while this is likely to be accompanied by an increase in gross margin, Teslarati quoted as saying from an analyst statement. Rosner also highlighted the potential of Giga Berlin once the factory is fully ramped up. Although he sees a certain production risk from a possible gas crisis in Germany, he referred to Tesla’s flexibility and was therefore confident that the company would weather potential storms in the future. “All in all, we believe 2023 could be a pivotal year for Tesla and continue to view it as one of the most compelling stories in the auto sector. We are adjusting our estimates following the 3-for-1 stock split, setting our price target at $375 and reiterate our BUY rating,” the analyst continued.

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