Tesla Inc (NASDAQ:TSLA) has seen its target price hiked to US$325 from US$160 by analysts at UBS, who said they expected announcements from the company’s upcoming battery event on September 22 will be “significant”.
In a note on Friday, the Swiss bank predicted the event will see new cell technology, notably a dry electrode design, at its core, adding that they expected the event will cement Tesla’s “cost and technology lead for several more years”.
UBS said the dry electrode technology is likely to enable a 50% higher energy density of up to 400 watt hours per kilogram (Wh/kg) versus 260 Wh/kg today, as well as allow “much better longevity” in batteries with “potentially a cobalt-free chemistry” and an estimated US$70-US$80 per kilowatt hour (kWh) cell cost over the next three years, saving around US$2,300 per vehicle.
However, the bank’s analysts said that aside from the new battery technology, the company “likely needs more than that to drive shares from here”.
“There is speculation for a Model S & X refresh incl. a new "Plaid" top-end version (possibly equipped with the new cells). The new cell design could also be used in the new Roadster, the top-end Cybertruck and possibly even in the Semi (unlikely to be in focus on battery day). For as long as there is no big "one more thing" on the agenda, we think all of the above is already fully discounted”, UBS said.
As a result, the bank said they now expected Tesla to sell 2mln in 2025, around 15% of global battery electric vehicle market share.
However, UBS did retain its ‘neutral’ rating on the stock, saying they expected the shares to “enter a new phase of consolidation as fundamentals won’t follow quickly enough for a further re-rating”.
Shares in Tesla were 3.8% higher at US$385 in pre-market trading on Friday.