Tomahawk, WI 08/12/2014 (Basicsmedia) – Tesla Motors Inc. (NASDAQ:TSLA) impressive run in the electric auto industry looks to have finally caught the eye of analysts at Deutsche Bank AG (USA) (NYSE:DB) who have consequently increased their share price target from $220 to $310 with a ‘Buy’ rating,up from a ‘Hold’. Tesla move to reduce its operating costs continues to be one of the most-attractive features according to CNBC’s, Timothy Seymour, as they are now perceived more cost effective. Deutsche bank has also increased its production capacity estimate of the company by almost 40%.
“I tell you part of the story here is that they are actually bringing costs down, and there’s an argument that these guys may be more cost effective than an internal combustion engine. […] What Deutsche Bank AG (USA) (NYSE:DB) did today is also they upgraded production deliveries, almost 40% within the next couple of years which again I think is shocking,” said Mr. Seymour.
Tesla Motors Inc. (NASDAQ:TSLA) is reportedly planning to increase its production capacity to almost a million vehicles by 2025 which according to ‘Fast Money’ crew on CNBC, is a huge undertaking. Competition is set to be rife going forward which might considerably affect its margins especially in terms of profits. Tesla good run in the Electric Vehicle has, on the other hand, been attributed to minimal pressure in terms of competition, something that might change in the long run according to Seymour.
“I think the whole concept of this guy’s increasing deliveries by 10 fold by 20, by 2020 is the biggest problem here I think the assumption that there is no other competition in the space. So I am of the opinion this is a fantastic technology company, therefore, if you want to put a technology multiple on that, that is fine. But don’t think these guys are going to be competing, in the same way, without any competition,” said Mr. Seymour.
The upcoming Gigafactory also continues to earn the company positive reviews at the back of its stock surging by almost 600% over the past one year. Pete Najarian remains cautious on Tesla Motors Inc. (NASDAQ:TSLA) on the fact it is not yet clear as to how the company will start making money and the total amount they would be able to make, maintaining it only takes a leap of faith to remain bullish on the company’s prospects going forward.