Tesla is said to have held talks about a factory in Saudi Arabia. However, Elon Musk clearly rejects this.
• Elon Musk reportedly in talks about Saudi Tesla factory
• Elon Musk: “Another completely wrong article from the WSJ”
• Goldman Sachs analyst cuts Tesla’s margin forecast
Tesla in talks about Saudi factories?
According to reports, the courtship for the next Tesla Gigafactory continues. Musk is said to have recently met Turkish President Recep Erdogan in New York. Erdogan is said to have asked the Tesla boss to build a new production facility in Turkey, as Manager Magazin reports. According to a Turkish news agency, Musk replied that Turkey was one of the “most important candidates” for the new plant. But Turkey is not the only place that should qualify as a location for a new Tesla factory. According to reports in the Wall Street Journal (WSJ), the emissaries of Saudi Arabia’s crown prince are also said to be courting the US company. As Manager Magazin reports, citing the WSJ, they are primarily intended to lure people with the promise of being able to supply Tesla with important raw materials from Africa. They are said to have already taken care of this in the past few months.
A deal with the Saudis could mean that Tesla could well achieve its goal of selling 20 million vehicles annually by 2030. As Teslamag explains, citing the WSJ, the crown prince has been interested in a Tesla factory in his own state for years. According to an informed person, the first discussions are said to have started this summer.
Musk denies reports
However, such negotiations are not entirely unproblematic. Musk has already had some trouble in recent years with his connections to the Saudis. The kingdom’s sovereign wealth fund is also the majority owner of Tesla’s US competitor Lucid. However, Musk himself rejects the reports via the social media platform X (formerly Twitter). In his tweet, which included a screenshot of the WSJ report, he wrote: “Another completely wrong article from the WSJ.”
Yet another completely false article from WSJ pic.twitter.com/sisFcxYKxI
– Elon Musk (@elonmusk) September 18, 2023
Goldman Sachs lowers Tesla margin forecast
After Musk denied reports of alleged negotiations over Saudi factories, Goldman Sachs reduced Tesla’s margin forecast. As Investors Business Daily reports, Goldman Sachs analyst Mark Delaney lowered Tesla’s 2023 and 2024 earnings estimates, saying the electric car maker could cut vehicle prices in 2024 to keep volume up. Nevertheless, the expert maintained his neutral rating on Tesla shares, with a price target of $275. Compared to the last price of $244.12 (as of September 26, 2023), there is an upside potential of more than 12 percent.
The analyst lowered earnings expectations for the 2023 financial year from $3.50 to $3.40 per share. For the 2024 financial year, he forecast a profit of $4.65 (previously: $4.75).
With the repeated price cuts for the vehicles, Musk triggered competition over the prices of electric vehicles. However, as expected, this strategy resulted in a reduction in profit margins, which fell below the minimum level targeted by the company. Delaney explained that his expectations for short- to medium-term margin pressures are offset by the positive view of Tesla’s leading position in the industry and long-term growth potential.
Editorial team finanzen.net
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