Photo: Tesla
Analysts are bullish about Tesla’s prospects to dominate the EV sector in the years to come. They take into account recent price hikes to compensate for the cost inflation, the new gigafactories coming online, and the positive cash flow. Based on previous experiences, the Master Plan Part 3 will only add to this favorable image of Tesla’s business.
Tesla’s CEO Elon Musk let everybody know he is working on a new master plan for Tesla’s future, aptly named Master Plan Part 3. Speculations abound as Musk hinted at a few key areas that will be addressed in the new master plan. Chief among them are Tesla “scaling to extreme size” and artificial intelligence. Although broad in scope, these two areas might prove easier to achieve than the objectives lined up in Master Plan Part Deux, a perspective shared by financial analysts.
Jefferies analyst Philippe Houchois believes Tesla is well-positioned to overcome the hurdles all car companies face and has a mountain of cash to do it. Indeed, judging by last year’s results, Tesla not only has a positive cash flow, but the rate at which it accumulates money is mind-boggling. This should allow Musk plenty of wiggle space with his Master Plan Part 3, which should be gargantuan.
“We have been trimming estimates across our OEM coverage, but we are raising them at Tesla on price increases more than compensating risk from volume and battery cost inflation,” Houchois noted. “With cash accumulating at a faster pace than Tesla’s ability to grow physically, we look forward to Elon Musk revealing Master Plan Part 3.”
Houchois expects bold objectives with part 3 of Tesla’s master plan, well beyond financing, energy storage, and even FSD, as these combined would barely make a dent in Tesla’s fast-growing cash pile. Although the analyst cautions there are still risks to take into account, he notes Tesla has already surpassed major problems. The production is ongoing at the new gigafactories in Austin and Berlin, while the Shanghai facility is on course to double its capacity and a new plant should be announced soon.
All these considerations made Houchois recommend buying Tesla stock, although the analyst lowered the price target from $1,400 to $1,250. This was done after carefully considering the “riskier macro and geopolitical environment for valuation.” At the time of writing, Tesla stock was trading at $1,008, up almost 1% from the day before when it jumped more than 15% following the Giga Berlin opening.
Supply chain problems that bogged down other carmakers were not affecting Tesla in the same manner. Tesla was quick in securing the necessary raw materials, “all the way to the mine” as Musk likes to say, and the chip shortages were easy to mitigate by switching to different chips that were readily available. The fact that Tesla is vertically integrated and makes in-house most of its components and even the software used in its vehicles sure helps a lot.
Jefferies analyst Philippe Houchois believes Tesla is well-positioned to overcome the hurdles all car companies face and has a mountain of cash to do it. Indeed, judging by last year’s results, Tesla not only has a positive cash flow, but the rate at which it accumulates money is mind-boggling. This should allow Musk plenty of wiggle space with his Master Plan Part 3, which should be gargantuan.
“We have been trimming estimates across our OEM coverage, but we are raising them at Tesla on price increases more than compensating risk from volume and battery cost inflation,” Houchois noted. “With cash accumulating at a faster pace than Tesla’s ability to grow physically, we look forward to Elon Musk revealing Master Plan Part 3.”
Houchois expects bold objectives with part 3 of Tesla’s master plan, well beyond financing, energy storage, and even FSD, as these combined would barely make a dent in Tesla’s fast-growing cash pile. Although the analyst cautions there are still risks to take into account, he notes Tesla has already surpassed major problems. The production is ongoing at the new gigafactories in Austin and Berlin, while the Shanghai facility is on course to double its capacity and a new plant should be announced soon.
All these considerations made Houchois recommend buying Tesla stock, although the analyst lowered the price target from $1,400 to $1,250. This was done after carefully considering the “riskier macro and geopolitical environment for valuation.” At the time of writing, Tesla stock was trading at $1,008, up almost 1% from the day before when it jumped more than 15% following the Giga Berlin opening.
Supply chain problems that bogged down other carmakers were not affecting Tesla in the same manner. Tesla was quick in securing the necessary raw materials, “all the way to the mine” as Musk likes to say, and the chip shortages were easy to mitigate by switching to different chips that were readily available. The fact that Tesla is vertically integrated and makes in-house most of its components and even the software used in its vehicles sure helps a lot.
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