Analysts Met With Tesla's New CFO: Here's What Happened

Credit Suisse's Dan Galves maintained an Outperform rating on Tesla Motors Inc TSLA, with a price target of $240. Following a tour of the company's Fremont, CA, assembly plant and meeting with the new CFO, Jason Wheeler, Galves said that the plant appeared more evolved since his last visit in mid-2014. The analyst noted that the plant was more organized and automated due to the significant capacity investments made over the past 18 months. The capacity actions include final assembly capability of over 100,000 units annually, body assembly estimated at 3,500 per week, eventual paint shop capacity of 500,000 units per week and a second stamping press with the 10-20 times the throughput capacity of the company's legacy press. "Over time, the company sees potential for substantial production cost declines as higher-volume equipment and changes in processes built around high-volume (vs low-volume) are optimized," according to the Credit Suisse report. Galves believes that the bulk of Tesla Motors' cost differential is associated with its low-volume processes and limited manufacturing experience that that due to differences in Powertrain costs. The analyst mentioned that the new CFO "clearly sees operating leverage and cash burn reduction as top priorities in 2016," while adding that there were numerous opportunities ahead for the company including "inbound freight, reduced scrap, higher service center capacity utilization and continued reliability improvements."