Tesla (TSLA) has secured a key supply chain that should continue to support production of its electric cars in China. Reuters reports that a Chinese electric vehicle battery maker, CATL, has extended a battery supply deal with the U.S. automaker.
In a regulatory filing, CATL confirms it has extended its battery supply deal until December 2025. The batteries are expected to support the production of Model Y sport utility vehicles and Model 3 sedans that Tesla is currently producing in Shanghai, China.
In addition to CATL, Tesla has also inked a battery supply deal with Panasonic Corp (PCRFF) and LG Energy Solution. (See Tesla stock chart on TipRanks)
Recently, Goldman Sachs analyst Mark Delaney reiterated a Buy rating on Tesla with an $860 price target, implying 24.9% upside potential to current levels. The buy rating comes on the heels of Tesla starting deliveries of the Model S Plaid, a high-end version of the Model S, which can accelerate from 0 to 60MPH in less than 2 seconds.
Delaney stated, “While the market for the Plaid itself is relatively small, we believe it is an important product given that 1) the Model S Plaid helps illustrate Tesla’s technology leadership position, which we consider one of the reasons for its strong share in EVs (along with other factors including its brand as the leader in EVs and clean transportation, and its ecosystem that includes a charging network and energy generation/storage).”
According to Delaney, the superior acceleration that Tesla EVs offer supports a positive view of EV adoption.
Consensus among analysts is a Hold based on 10 Buys, 7 Holds, and 6 Sells. The average Tesla price target of $632.10 implies 8.22% downside potential to current levels.
TSLA scores 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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