Tesla Bull Says Battery Day Could 'Profoundly Change Auto Business Model'

Automaker Tesla Inc’s TSLA competitive edge continues to diversify and grow in other dimensions, like brand leverage, software, battery capacity and industrial efficiency, according to Jefferies.

The Tesla Analyst: Philippe Houchois maintained a Buy rating on Tesla and raised the price target from $1,200 to $2,500.

The Tesla Thesis: The company is expected to launch its million-mile battery Sept. 22 on Battery Day, which could “profoundly change the auto business model,” Houchois said in a Wednesday note. (See his track record here.) 

Tesla is expected to set new benchmarks for battery density, materials and industrial processes that could bring pack costs down to below $100 in coming years, the analyst said. 

Battery Day will provide further insight into the extent of disruption the "million-mile" batteries could cause in the way the industry designs, manufactures and sells cars, while also shedding light on whether a lithium iron phosphate battery will “accelerate the roadmap to affordability,” he said. 

While Tesla's investment case often hinges on cars, its edge in this space is likely to begin shrinking, Houchois said.

"At the same time, we see Tesla continuing to challenge the way the auto industry operates from leveraging its 'universal' brand to securing battery supply, driving improvements in capex cost and industrial productivity while potentially adding to its current edge in software design and autonomous vehicles."

TSLA Price Action: Tesla shares were up 4.19% at $2,108.20 at last check Wednesday. 

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Photo courtesy of Tesla.