Deutsche Bank ‘All In’ on Tesla Following Giga Texas Meeting

Tesla’s annual shareholder’s meeting left some disappointed with margins and a lack of new updates. However, some analysts recently reiterated their Buy rating on the company after a tour of the company’s newest U.S. plant, notably including new details on the Cybertruck and Tesla’s next-generation platform.

Above: Teslas charging at a Supercharger (Casey Murphy / EVANNEX).

Deutsche Bank analysts were impressed following a tour of Tesla’s Gigafactory Texas in recent weeks, according to a report from Investing.com (via Teslarati). The investment firm maintained its 12-month price target of $200 on the stock and its Buy rating, adding that Cybertruck tooling was going well ahead of its expected launch later this year. The tour also included meetings with Tesla Head of Investor Relations Martin Viecha and IR Director Travis Axelrod.

“All in,” Deutsche Bank wrote. “We came away encouraged that Tesla could deliver cost improvements and efficiencies in the quarter ahead, which may help offset some of the pressures.”

Analysts also said that Giga Texas is “well designed and runs very efficiently, and is clearly making good progress in ramping up both vehicles and battery cells volumes, and in installing tooling for Cybertruck.”

Tesla told analysts that improvements to its manufacturing processes stand to reduce costs, in addition to other cost-reduction factors like its use of credits from the Inflation Reduction Act. Still, the statements weren’t without some caution, as they also pointed to an uncertain macroeconomic environment over the next 12 months, and concerns surrounding price cuts and demand.

“We still worry the company may have to take additional price cuts in a weakening environment, which could put further pressure on earnings,” the analysts added.

Tesla also revealed to Deutsche Bank that the company had been considering adding advertising back to its strategy for several months, especially as a way to help address misconceptions surrounding EVs. After seeing recent enthusiasm from investors, Tesla added that it felt inclined to act on those discussions.

Additionally, Tesla said that it would remain devoted to increasing sales volumes for as long as the company can bring in positive free cash flow. The company’s next-generation platform is expected to have a much higher production volume and be more-affordable, with two models set to debut on it.

“Mid-term, Tesla confirmed that it is working on developing two new models on its next-gen platform and represent its highest priority at present,” Deutsche Bank said. “We are also encouraged by the targeted combined unit volume of 5 million, and we remain bullish on the opportunity presented within the next-gen platform.”

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