Tesla Analysts Say Texas Shift 'Strategic Move,' Capacity Expansion Plans Increasingly Ambitious After Shareholder Meeting

Tesla, Inc. TSLA presented its annual shareholder meeting Thursday from its under-construction Giga Austin factory. 

In line with expectations, the company announced a change in domicile from California to Texas and said Cybertruck production will start in 2022.

Tesla Sets Increasingly Ambitious Goals, Needham Says: Tesla reiterated at the meeting that it continues to pursue the ambitious goal of 20 million EVs by 2030, while also striving to make them affordable, Needham analyst Rajvindra Gill said.

The goal of 20 million, the analyst said, seems improbable, given the manufacturing footprint that may be needed for this over the next eight to nine years.

Despite the plan to shift the headquarters to Texas, the company said it will continue to expand its manufacturing capacity in California and Nevada by 50% each, the analyst noted. The new full-self driving beta will be released to select drivers over the next few days, Gill said, citing the company.

Supply chain constraints seem to be the cause of delays in the production of Cybertruck, Semi and Roadster, the analyst said. CEO Elon Musk also ruled out the potential for a stock split and dividends, he added.

"While recent momentum in deliveries has exceeded expectations, we remain cautious on Tesla shares given their valuation and maintain our Underperform rating." 

Related Link: What Tesla's Record Q3 Deliveries Could Mean For Its Financial Results

Tesla In Position Of Strength, Wedbush Says: The decision to move the headquarters to Austin away from Palo Alto is a strategic move, as the company aggressively builds out its Austin footprint, Wedbush analyst Daniel Ives said. Fremont will continue to be key for Tesla around Model 3 production, the analyst said.

The move, he said, is apparently the first step toward Tesla making Austin its domestic and global foundational location over the coming decade.

The recent frustration with California officials likely accelerated this move, he added.

Musk talked about growing capacity, with Austin and Berlin set to ramp significantly in 2022, Ives noted.

Cybertruck production/rollout for late 2022/2023 remains another key growth driver for Tesla over the coming years, the analyst said. The Model Y should be on track to be the biggest driver of Tesla's growth over the next 12 to 18 months, he added.

"Clearly, Tesla is in a position of strength in this green tidal wave and doubling down on its Austin facility is a smart offensive strategic poker move," Ives said.

Tesla Ratings, Price Target: Needham has an Underperform rating on Tesla shares and it estimates present value of $460 per share, suggesting 42% downside from current levels.

Wedbush maintained a Buy rating and $1,000 price target.

TSLA Price Action: Tesla shares were slipping 1.22% to $$783.92 midday Friday. 

Related Link: Why Tesla's Q3 Numbers Are 'Eye Popping' and Hard to Poke Holes In