RBC Capital Markets reiterated its Outperform rating on shares of Tesla (NASDAQ: TSLA) following an investor tour of Giga Nevada. The company is doing what no one else in the industry is doing, so it will reap the biggest benefits. The firm has a 12-month price target of $305.
Tesla hosted an investor tour of Giga Nevada, joined by RBC Capital Markets. Currently, the factory's capacity is 35-38 GWh. Batteries are produced there, most of which are intended for electric vehicles. This is a joint venture with Panasonic. There, the Japanese company produces battery cells in a separate area. Then, Tesla assembles battery packs from them for its electric vehicles.
In the spring, Tesla announced its intention to expand Giga Nevada by adding 100 GWh. This expansion will include the production of 4680 battery cells, which are proprietary to the Texas manufacturer. Among other things, this approach distinguishes Tesla from traditional OEMs in the US, which prefer to form joint ventures (50/50 partnerships) to produce batteries.
RBC analysts wrote in a note, according to investing.com:
“Unlike legacy OEM peers in the US who are pursuing JVs to make battery cells, Tesla is going solo – which should enable it to capitalize on IRA credits more than any other automaker and even be a tier 1 battery supplier.”
In addition to batteries, Giga Nevada also produces drive units. This is also a distinctive feature of Tesla that sets it apart from other automakers. Tesla has the potential to become the largest manufacturer of these components in the world and has been producing them for 10-15 years.