By Michael Elkins
Canaccord Genuity reiterated a Buy rating and $275.00 price target on Tesla (NASDAQ:TSLA) following the electric vehicle maker’s latest price cuts.
Analysts wrote in a note, “On Thursday, reports indicated that Tesla has again cut prices across all models sold in the U.S. The company has now cut prices 5 times since the beginning of 2023 globally. In addition to the price cuts, Tesla also introduced a cheaper base, All-Wheel Drive Model Y variant — which could utilize the company's in-house 4680 cells. Importantly, this variant is priced at $49,990 and likely enables customers to take advantage of the full $7,500 tax credit provided by IRA.”
Over the weekend, Tesla also announced that it intends to open a new Megafactory for additional production capacity of Megapack batteries used in its energy storage products. This plant will initially produce 10k Megapack batteries per year out of Shanghai, which will be sold globally. The plant is expected to come online by 3Q23 and will start production in 2Q24.
Furthermore, according to The New York Times, the EPA is proposing limits in some of the most aggressive U.S. climate regulations to date, requiring electric cars to represent between 54%-60% and 64%-67% of new cars sold in the U.S to be all electric by 2030 and 2032, respectively. Analysts anticipate OEMs to continue to ramp EV production — with significant bottlenecks ahead in production capacity, materials availability, and manufacturing expertise.
Shares of TSLA are up 0.89% in pre-market trading on Tuesday.