Deutsche Bank analyst Emmanuel Rosner said that in the medium term, Tesla (TSLA. US) "An impressive trajectory in terms of battery technology, capacity, and especially cost, will continue to accelerate the global shift to electric vehicles and significantly expand Tesla's lead." The analyst gave Tesla a "buy" rating with a price target of $1,000.
A key factor rosner is bullish on Tesla is the cost advantage. The analyst believes that the "most important indicator" in the financial statements of electric vehicle manufacturers may be the average cost of sales (COGS) per vehicle.
Tesla has done a great job of this. In the third quarter of 2018, the average cost per vehicle was $54,000, and 3 years later, in the third quarter of 2021, this cost dropped to $36,000 per vehicle, during which time the cost of selling decreased by $18,000. During this time, the price of the battery / kWh is "basically stable", and the reduction in the cost of selling goods is almost independent of the cost of the battery.
Rosner believes that "improved design, more efficient factories, full-speed production, better material sourcing, localized supply chains and reduced man-hours" are the reasons for the lower costs. The analyst added: "Ev competitors haven't even started these jobs yet."
On the competitive side, there will be a fundamental shift in consumer perception of electric vehicles in 2021. The result is a "huge gap between supply and demand". For example, Tesla's products currently have a backlog of 7-14 months.
Rosner believes that companies that have enough capacity to "secure enough supply to produce cars at the fastest speed and deliver them at the best cost" are the most likely winners, while Tesla sees it as having a "considerable lead" in this regard.
Rosner didn't dispute that claim, saying Tesla's competitive advantage lies in its efforts to "secure supply, vertically integrate and reduce costs."
Over the past 3 months, 26 analysts have evaluated Tesla's prospects, with 13 giving a "buy" rating, 7 giving a "hold" rating, 6 giving a "sell" rating, and a consensus rating of "moderate buy" with an average price target of $985.64, up 3% from current levels.
