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Analyst Reveals Tesla's 'Secret Sauce'

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Analyst Reveals Tesla's 'Secret Sauce'

A big part of Tesla Motors Inc (NASDAQ: TSLA)’s future is the massive Gigafactory the company is building in Nevada. In recent months, Global Equities Research analyst Trip Chowdhry has attended seven different battery technology summits and conferences to get a sense of what the Gigafactory is capable of.

According to Chowdhry, the factory will have the capacity to produce 150 GwH of Li-Ion batteries. The factory will be producing 20700-type cell battery packs, which Chordhry predicts will be up to 18 percent more efficient than the previous model-18650.

He also noted that what makes Tesla’s batteries unique is the company’s electrolyte “secrete sauce,” which is responsible for the vehicle’s driving range and acceleration.

Chowdhry also noted that, while Lithium plays a large role in Tesla’s batteries, many Lithium investors are misguided.

“Having Lithium as an investment theme is foolish, plenty of Lithium is available – probably there is as much Lithium available as is Sodium (Common Salt we get at Safeway for $0.99),” he explained.

Related Link: Tesla Spends $6 On Advertising Per Vehicle; The Industry Average Is $1,000

Chowdhry believes the Gigafactory alone could eventually be valued at $50 billion, and Global Equities Research has a $385 price target for Tesla.

So far this year, Tesla stock is down 8.6 percent, while the Global X Funds (NYSE: LIT) is up 27.4 percent.

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Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for TSLA

DateFirmActionFromTo
May 2020Daiwa CapitalInitiates Coverage OnOutperform
May 2020WedbushMaintainsNeutral
May 2020JMP SecuritiesMaintainsMarket Outperform

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