Tesla Inc. (TSLA) CEO Elon Musk has been given a green light to resume production at its main Fremont auto plant after a confidence plea by U.S. President Donald Trump.
Alameda County officials agreed to let Tesla reopen the California plant as early as next week if the automaker complies with certain safety conditions. Until then it can only maintain “minimum basis operations”.
“California should let Tesla & Elon Musk open the plant, NOW”, Trump said in a Twitter (TWTR) post on Tuesday. “It can be done Fast & Safely!”
Billionaire Musk said Monday he is resuming production at the electric automaker’s California factory at the risk of being arrested as coronavirus-related closure orders are still in place.
The Alameda decision comes after Tesla earlier filed a lawsuit against the County claiming its lockdown orders have prevented the automaker from restarting operations at its Fremont, California plant planned for last week. Furthermore, Musk threatened to move the carmaker’s operations out of California to Texas or Nevada saying that if the company retains its “manufacturing activity at all, it will be dependant on how Tesla is treated in the future”.
Four-star analyst Adam Jonas at Morgan Stanley, who has a Hold rating on the stock with a $680 price target says that there might be more to the story of the company leaving California than meets the eye.
“We can’t help but think about a bigger story at work here – that is Tesla’s extremely ambitious growth plans in areas in both auto manufacturing and energy storage,” Jonas said in a note to investors. “Musk’s comments of reaching 10 million units of vehicle volume supported by ‘terawatt’ scale battery factories would imply far greater levels of spending than we have forecasted and greater than we believe demanded in global markets for many years to come.”
Tesla shares almost doubled in their value this year and were trading 0.2% lower at $809.41 as of Tuesday in U.S. trading.
Overall, Wall Street analysts are sidelined on the stock. The Hold consensus rating is based on 10 Sells, 9 Holds, and 8 Buys. Following this year’s rally it comes as little surprise that the $603.58 average price target projects 25% downside potential in the shares in the next 12 months. (See Tesla’s stock analysis on TipRanks).
This is not the first time Tesla’s Musk, who has 34 million Twitter followers, voiced his controversial views on the lockdown orders tied to the coronavirus pandemic. Earlier this month, he told investors that the virus-related regulations are a “key risk” to the business and called lockdown orders “fascist” demanding people should get their freedom back.
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