Written by Sinad Karahimetovic
Analyst Piper Sandler noted lower delivery wait times in areas supplied by Tesla’s Shanghai plant.
Tesla (NASDAQ 🙂 managed to produce nearly 77,000 units of electric vehicles (EV) in August, a record production that was driven by the latest update. The analyst sees higher monthly production totals in the coming months.
“With increased production and reduced wait times, we believe that Tesla will continue to be uniquely able to quickly meet consumer demand for electric vehicles at acceptable price points. While other brands struggle to increase production, Tesla will (presumably) begin to lower prices, thereby boosting its share in the market at the expense of everyone else.
While production rises, margin expansion is likely to be capped by price cuts. Hence, investors should not expect gross margins to “sustainably exceed 30%” as they did in the second half of last year and early 2022, the analyst added.
“If Tesla’s upstream supply bottlenecks are really breaking, we think it’s a frightening prospect for other brands,” he concluded.