Tesla (NASDAQ: TSLA) will report their second quarter earnings at the end of this month, July 29th. While beating expectations of cars sold in the first quarter, Deutsche Bank (NYSE: DB) downgraded Tesla from buy to hold. Although increasing Tesla’s target price to $280 last week, Deutsche Bank analyst Rod Lache noted that the potential value of Tesla is already reflected within its current stock price.
The Model X combines the space and functionality of a seven-seat sport utility vehicle with the uncompromised performance of a Tesla. With the upcoming release of its new Model X SUV, Elon Musk not only optimistic but also confident that Model X will double the company’s annual sales. Dan Galves, a Credit Suisse (NYSE: CS) automotive-analyst highlights that Tesla is expected to already deliver approximately 7,000 orders of the Model X this year.
With Tesla’s ambitious goal of producing 500,000 vehicles by 2020, we see their plans unfold as Tesla’s land holdings in Nevada nearly tripled in these recent months. Purchasing nearly 2,000 additional acres near Reno to build the “gigafactory”, Tesla has made a crucial step forward to increase manufacturing power – a step that cost them an overwhelming investment of 5 billion dollars. While this “gigafactory” allows them to increase production, Tesla plans to hire up to 6,500 new employees for this factory when completed. The state of Nevada has provided incentives to Tesla of up to $1.3 billion dollars to further progress with the construction of the “gigafactory”, showing great local support and optimism for the company’s growth.
Tesla’s partner for manufacturing the batteries for their cars Panasonic, is also increasing their manufacturing capabilities by partnering with 15 other companies to supplement the manufacturing process.
It seems Tesla is confidently moving in the right direction to reach their ambitions of manufacturing 500,000 cars in 2020. With confirmation from the State of Nevada to construct the gigafactory, Tesla will have no resistance against their plans to increase their production capabilities.
Investors will be able to see on July 29th whether Tesla’s recent manufacturing investments are justified with their earnings for the first half of the year.