Tesla Inc TSLA could exit this year with a 2 million unit run-rate for deliveries as two of its key factories, Giga Berlin and Giga Texas, come online, according to Wedbush Securities analyst Dan Ives.
The Tesla Analyst: Ives has maintained an Outperform rating and a $1,400 a share price target on the Elon Musk-led company’s stock.
The Tesla Thesis: In January, Ives estimated Tesla could likely reach 1.5 million unit volume in 2022 despite the lingering supply chain issues.
The analyst said he sees unit deliveries are “trending well ahead of Street expectations.”
“We believe China and Europe in particular are tracking at least 15%+ ahead of Street estimates and combined with U.S. Model Y-driven strength Tesla could now be on a 2 million unit run-rate exiting 2022.”
On Tuesday, Tesla officially opened its first factory in Europe for business and Musk handed over 30 new Model Ys to customers from the Giga Berlin, which has a capacity of producing 500,000 units per year. The site will produce the Model Y and reportedly later, the Model 3.
“We are seeing incremental Model Y strength in Europe over the past few months which coincides with cutting the red ribbon on the flagship Berlin factory this week,” Ives said, adding that the rising oil and gas prices are going to push EV adoption faster.
The analyst said the Wall Street has over the past week started to better appreciate what the “seminal” launch of Giga Berlin means for Tesla’s “supply story” in 2022 and beyond.
Another Tesla factory, Giga Texas, has an annual capacity to build 500,000 units and is awaiting final certification. It is expected to be online next month.
“We also believe the April 7th red ribbon-cutting ceremony/BBQ in Austin will be another defining event for Tesla as the company further flexes its EV manufacturing muscles while other EV competitors struggle to get factories off the ground.”
See Also: Graphic: How Giga Berlin Stacks Up Against Tesla's Other Factories
Why It Matters: Giga Berlin is expected to help Tesla lift market share in Europe while lowering reliance on the Giga Shanghai and improving scale and profitability.
In addition to Giga Berlin, Giga Texas will make the Model Y.
The world’s richest man is also working on the next sequel of his Master Plan and has said it would be “scaling to extreme size.” This could give Tesla the much-needed headstart over legacy rivals such as Volkswagen AG VWAGY, Ford Motor Company F and General Motors Company GM, which are just getting started.
TSLA Price Action: Tesla stock is down 0.49% at $1,007.70 Friday morning at publication, according to Benzinga Pro.
Photo: Courtesy Tesla Inc.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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