Tesla Inc TSLA held its first Investor Day on Wednesday, sharing more details about its plans for electric vehicles, increased vertical integration and sustainabiltiy efforts. Here's what analysts are saying after the event.
The Tesla Analysts: RBC analyst Tom Narayan has an Outperform rating and $223 price target.
Morgan Stanley analyst Adam Jonas has an Overweight rating and $220 price target.
Needham analyst Chris Pierce reinstated coverage of Tesla with a Hold rating.
Oppenheimer analyst Colin Rusch has a Perform rating.
Bernstein analyst Toni Sacconaghi has an Underperform rating and $150 price target.
GLJ Research analyst Gordon Johnson has no rating or price target on Tesla.
Related Link: Elon Musk Gives No Timeline Of New Tesla Models At Investor Day
The Tesla Takeaways: The investor event provided an in-depth walkthrough of the manufacturing and production capabilities of Tesla and how it could improve costs, Narayan said.
“We walked away with a better appreciation for and confidence in TSLA’s ability to continue to scale production and introduce new products at a low cost,” the analyst said.
With a focus on helping more people to transition to electric vehicles, Tesla likely needs a cheaper vehicle for the future, something Narayan said he believes is coming.
“Whether that comes in the form of price/cost reductions for existing models or a new model is TBD.”
Jonas highlighted Tesla's improved vertical integration and cost-cutting initiatives.
“Tesla’s audacious efforts on vertical integration are about to pay off,” the analyst said.
Tesla is leading the “race to the bottom” when it comes to costs for electric vehicle companies, he said.
“Tesla gave a number of drivers for a 50% cost reduction for its next-gen platform. In a race to the bottom, we seriously question how the competition can keep up.”
Jonas praised Tesla's manufacturing capabilities and massive scale.
“Over time, we would expect the forthcoming innovations brought to market by Tesla become the industry standard, ultimately used by all automakers not unlike how Henry Ford’s moving assembly line became auto industry norm.”
Pierce said the Investor Day provided helpful details on how Tesla has reached its current point but was short on specific near-term catalysts.
“TSLA highlighted improving on past learnings as it launches its next-gen vehicle platform, but offered no specifics on what type of vehicles would come off of these production lines or when those vehicles would be made available to consumers,” Pierce said.
The analyst said the biggest concern for the company is margin uncertainty.
Rusch called Tesla’s Investor Day an effective showcase of its efficiency.
“Specifically, we view TSLA’s integrated design, engineering, and manufacturing teams as core to driving cost efficiencies via process improvements but also enabling nimble response to supply chain and markets dynamics,” Rusch said.
The analyst said Tesla is targeting multitrillion-dollar markets with vehicles and storage opportunities.
Sacconaghi kept an Underperform ratting on Tesla and said the Investor Day was “long on vision, short on specifics.”
The analyst said the event was focused on the long-term and the Master Plan 3 laid out by Tesla CEO Elon Musk is short on details.
“Musk’s Master Plan 3 was more a message of hope for widespread electrification than a roadmap for Tesla, and executive updates – while informative – didn’t necessarily follow linearly,” Sacconaghi said.
Tesla provided no details of pricing or timing for its low-cost vehicle, which was expected by some at the event, the analyst said.
“We do not believe that Tesla can deliver a low cost offering in volume before 2025, and believe that Tesla will need to lower price in interim to hit its growth targets over the next two years.”
Johnson expressed concern for Tesla after the Investor Day did not reveal a new low cost Tesla vehicle, update timing for the Cybertruck release or discussion of robotaxi ambitions.
“Instead, it was three hours of vagaries, where very little new was offered, unlike the past 2017 ‘Master Plan Part Deux’ presentation where, among other things, Musk promised an electrified ‘high passenger-density urban transport’ and a full autonomous Tesla fleet of robotaxis, neither of which have come close to existing in the intervening years,” Johnson said.
The Tesla bear said the EV maker instead seemed to step away from specific commitments, a strategy that in the past that may have justified a high share price for Tesla “fanbois.”
“Every auto company in the world works relentlessly on driving down costs. There’s NOTHING special about TSLA’s focus there, and that also suggests TSLA is a car company, NOT a tech company,” Johnson said of Musk's comments on margins.
Johnson said with margins about to “implode” for Tesla, there could be significant downside to the stock in the near-term.
TSLA Price Action: Tesla shares are trading down 6.47% to $189.66 on Thursday.
Read Next: Tesla Investor Day Preview $25K Vehicle, Cybertruck Update, Vision For The Next Decade Expected
Photo courtesy of Tesla.
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