Tesla (NASDAQ:TSLA) is primarily known as a company that makes electric vehicles (EVs), but that only tells part of the story. In fact, when you sum up all the different elements, says Wedbush analyst Dan Ives, a bigger picture emerges.
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“With Tesla production strong and OEMs lining up for access to its supercharger network, we believe the sum-of-the-parts story for Tesla is fully in stride with its newly released supercharger network OEM deals, energy business, AI-driven autonomous path, unmatched battery ecosystem, and increased production scale/ scope globally adding to the Tesla golden EV success story,” the 5-star analyst explained.
A key element here is Tesla’s supercharger network. There are currently only ~5,000 superchargers on the grid, but by the end of 2024, the company has set its sights on adding another 7,500 chargers to the network. At the same time, it is opening them up to other EV makers, which should provide “another boost to accelerate its growth.”
It certainly looks like other OEMS are keen to make use of the network. While Tesla’s North American Charging Standard (NACS) connectors are different to the combined charging system (CCS), major auto names such as GM, Ford, Rivian, Mercedes-Benz, Nissan and Volvo/Polestar are signing up to use the network with Ives expecting others such as Hyundai, Honda/Acura and more to come on board too.
How much does Tesla stand to benefit from the network’s adoption? Ives anticipates that the supercharger segment will be generating around 3%-6% of total revenues, amounting to $10 billion – $20 billion by 2030.
Another major element in the sum-of-the-parts story involves the ramping of production for the 4680 battery cells. While production began at the Fremont facility, it has since accelerated with expansion to the gigafactories in Texas and Nevada.
With intentions to boost margins (which is a significant concern for investors) and elevate vehicle performance, management envisions the 4680 cells as the future of TSLA’s battery pack strategy. The roadmap involves incorporating these cells into all forthcoming TSLA models, such as the Semi, Roadster, and updates to Models S and X. Tesla projects an increase of 5 times in energy, 6 times in power compared to conventional vehicles, and an enhanced range of 16%.
All told, Ives maintained an Outperform (i.e., Buy) rating on Tesla shares, along with a Street-high $350 price target. The implication for investors? Upside of 48% from current levels. (To watch Ives’ track record, click here)
Ives is the Street’s most prominent TSLA bull by some distance right now. Elsewhere, the stock receives an additional 10 Buy ratings, 13 Holds and 5 Sells, all coalescing to a Hold consensus rating. Going by the $254.21 average target, the shares have room for ~7% growth in the months ahead. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
