Oppenheimer stays away from Tesla

Oppenheimer stays away from Tesla

Oppenheimer reiterated a Perform rating on Tesla (NASDAQ:TSLA) after visiting the electric automaker’s factory in Austin, Texas. Austin production reached 5K vehicles/week in May shortly after Berlin.

Based on Oppenheimer’s analysis, the current production of 4680 batteries is on track to sustain a rate of 1,000 vehicles per week. They anticipate that Tesla will primarily dedicate the majority of its 4680 battery capacity to support the ramp-up of the Cybertruck production, considering the improved availability of 2170 battery capacity from external suppliers.

Tesla is leading the way in innovation within the electric vehicle (EV) ecosystem, surpassing both its competitors and suppliers. One notable advancement is its transition from a 12V architecture to a 48V system, which has the potential to significantly decrease the amount of copper used in vehicles by a factor of 12 to 16. Additionally, Tesla’s focus on lithium refining involves the use of pressure leaching, a method that effectively eliminates significant waste streams and potential cost burdens.

Analysts wrote in a note, “With Austin production clearly accelerating from Analyst Day levels, we see TSLA investing in important innovations to enabling scaling, increased simplicity, and geopolitical derisking of its supply chain. These efforts, notably around lithium refining, vehicle simplicity, materials optimization, and software learning cycles, continue to be well ahead of peers. However, we believe the key near-term question for TSLA shares remains automotive GM as the company continues to grow share of global LDV’s.”

The analysts see that TSLA is enhancing its connection with demand drivers through strategic adjustments in price, considering advertising options, and making investments in market facilitation products such as insurance and financing in specific markets. Oppenheimer maintains a cautious stance due to the uncertain macroeconomic environment and timing of margin expansion. However, they acknowledge the possibility of TSLA shares experiencing short-term growth as the company surpasses its competitors in a volatile market.

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