‘Lofty goals and grandiose projections’: Here’s what 6 analysts had to say about Tesla’s Battery Day


 

FILE PHOTO: Tesla super chargers are shown in Mojave, California, U.S. July 10, 2019.  REUTERS/Mike Blake/File Photo
FILE PHOTO: Tesla super chargers are shown in Mojave, California


  • Tesla held its highly anticipated Battery Day event on Tuesday, where it showed off advancements and innovations in its battery technology that it plans to incorporate into its electric vehicle fleet.
  • A highlight of the event included Tesla’s plans to manufacture its own battery cells to help expand battery capacity so it can support the production of 20 million vehicles per year in the long term.
  • Here’s what six analysts had to say about Tesla’s Battery Day event.
  • Visit Business Insider’s homepage for more stories.

Tesla made a number of announcements at its highly anticipated Battery Day event on Tuesday.

Here are some highlights from the event:

1. Tesla plans to manufacture its own battery cells to help improve range and reduce costs.

2. A faster version of the Model S, called the Model S Plaid, will be available in 2021 for $139,990.

3. Tesla is aiming to sell a $25,000 electric vehicle in three years.

Shares of Tesla fell as much as 6% on Wednesday as investors were underwhelmed by the longer-than-expected timeframe for a $25,000 car and no mention of a million-mile battery. 

Here’s what six analysts had to say about the event.

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1. Goldman Sachs: Neutral, raised price target to $400 from $295

“Tesla stated that it could release a $25,000 car in about 3 years as a result of the reduction in pack cost. We believe that a vehicle at this price point would help Tesla to address a wide range of the light vehicle market. We expect the ability and timing for Tesla to fully achieve these targets to be one investor debate post the event, as Tesla has not always met its past targets.”

2. Wedbush: Neutral, price target $475

“This was a massively hyped event for Musk and Tesla and the battery production cost targets were staggering, which if achieved would be a potential game changer for the company’s cost structure and price points going forward. The stock is down on knee jerk reaction as the biggest disappointment of the event from the Street’s perspective was around no million mile battery announcement in our opinion as this was widely expected to be unveiled.”

3. JPMorgan: Underweight, price target $65

“Like other Tesla investor days, Battery Day was not without its share of lofty goals and grandiose projections, although these were of a decidedly longer-dated nature than at past events, which – along with a more hedged tone in general – we think could be helpful in managing near-term expectations this time around.” 

“Overall, we felt ‘Battery Day’ was effective in reinforcing confidence in Tesla’s ability to continue to lead in terms of battery cost and performance, although we still see the shares as substantially overvalued relative to the fundamentals.”

4. RBC: Underperform, price target $290

“Overall, we believe Tesla’s long-awaited battery day disappointed elevated expectations, as it highlighted some near-term stagnation in the price reduction of current lithium ion batteries; while next-gen battery/manufacturing technologies and products are ambitious, some are not unique and others could be further out than hoped. While we still believe TSLA is overvalued, given the interest in the name, weakness could be bought.”

5. Bank of America: Neutral, price target $550

“To fund core EV growth and initiatives announced at its Battery Day, we expect TSLA will look to raise low cost and widely available capital, likely well beyond its already announced intention to opportunistically raise $5bn in equity in early September. Simply put, in our view TSLA is a new disruptive (auto) company that may or may not be dominant in the long-term, but that does not matter as long as it can keep funding outsized growth, with almost no cost capital driving capacity expansion, which justifies a high stock price, in our view.”

6. Credit Suisse: Neutral, price target $400

“The success of Tesla’s battery strategy will rest on its ability to successfully ramp manufacturing. Yet we’d argue there will be a number of challenges ahead in ramping manufacturing. Tesla has a spotted history on manufacturing in the past. While Tesla now carries greater experience and also has significant capital, its plan to ramp on new technologies won’t be easy, and there is a lot more work to be done.”

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