Piper Sandler analyst Alex Potter recently increased Tesla’s price target from $1,300 previously to $1,350, maintaining a BUY rating. Potter’s price increase is based on Tesla’s recent 10-K annual filing.
Piper Sandler forecasts that Tesla will deliver 1.58 million vehicles in 2022, implying a 69% growth compared to 2021. For reference, Tesla had a total of 936,172 vehicles last year, very close to 1 million cars and over 50% more than 2020 when it delivered precisely 499,550.
Piper Sandler noted that Tesla aims for at least 50% unit growth in the future. It also observed that the Model Y is the most significant near-term growth driver while chip supply is Tesla’s limiting factor.
Tesla has been handling the chip challenge relatively well, given the circumstances. The company seems determined to overcome obstacles again in 2022. For instance, Tesla has already pulled non-critical steering wheel components from Model 3s and Model Ys made in Giga Shanghai to combat the chip shortage.
While Piper Sandler thinks Tesla’s yearly deliveries will increase, it also believes the company’s automotive gross margin will fall to 25.8% in 2022 (-120bps y/y). The investment bank noted that the decline reflects “the dilutive impact of new factories.”
Tesla has been working hard on its factories lately, both new and old. It is expanding the Fremont Factory and Giga Nevada to increase production capacity. While in Austin, Tesla Giga Texas is expected to deliver Model Y vehicles with structural battery packs and 4680 cells by the end of the first quarter. Over in Germany, Giga Berlin’s official full approval might be released by March.
In addition to the existing factories, Elon Musk announced that Tesla will be building new factories and new locations in the future. In China, the local government in the Liaoning Province hinted at a possible Tesla facility in Shenyang.
Tesla seems to have a lot more growth in its future based on Piper Sandler’s recent outlook. As the EV manufacturer is still dealing with challenges from the pandemic, growth may still be difficult in 2022. However, Tesla has already survived and thrived in 2021.