Tesla Top 5 Catalysts
Tesla finished their Q4, 2022 earnings call yesterday and there are 10 key catalysts that Gary Black, a well known Tesla analyst, has come up with. We'll go over them now and why they are so important.
1: Investor Day on 3/1/2023
This one is huge. The primary reason this one is huge is that Tesla will talk about their generation 3 platform - the Model 2 or compact car, along with a potential Robotaxi vehicle. Many people have patiently been waiting for information about this, and Tesla will most likely share a lot of details about the new compact car.
2: $7,500 EV credit through Q1, 2023
The IRA tax credit is still in full effect for Tesla, and it will last at least until the end of March 2023. This is because the battery sourcing requirements aren't quite outlined yet in the bill. The U.S. government will most likely create some stipulations that will make the batteries Tesla gets from CATL not qualify - or not qualify as much for the $7,500 credit.
3: FSD Beta goes to wide release in Q1, 2023
Tesla FSD is now at about 400,000 users, according to Tesla, which is an astonishing number. The more people that use FSD, the more it will improve due to the additional amount of data being gathered. I expect in a few years that Tesla will get to 4 million users of FSD and reach a breaking point of data that FSD becomes level 4 and Tesla's can become robotaxi's.
4: Megapack revenues and profits for Q1, 2023
This quarter, Q1, 2023, should see Tesla start to see the revenue from its next generation of Megapack from its Lathrop, CA factory. Right now, most of the revenue is coming from the Megapacks built at Nevada, which is a much smaller and less efficient factory for building the Megapack.
I expect to see Tesla Energy earn about $20 billion in revenue in 2023 and about $8 billion in gross profit. This is the 1 catalyst that is not well known, and most people are sleeping on. The reason for this is that Tesla Energy has not contributed much in the past, and most people are expecting not much to come from this.
5: Twitter CEO announcement
Many have complained that Elon Musk has not had his attention on Tesla, but has been, instead, distracted by Twitter, but I would disagree. I think lately he has been very focused on Tesla and using Twitter as a platform to promote Tesla and its products.
Elon Musk needs to anoint a CEO in Q1, 2023, in order for people's fears about Elon Musk being distracted to go away.
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Tesla - the Next 5 Catalysts
6: 450,000 or more deliveries in Q1, 2023
Tesla's recent price cuts double the demand of its vehicles around the world and whether this doubling of demand sticks around, remains to be seen. Even so, Tesla is going to have a very strong quarter in production and deliveries, and this is just the first quarter of the year.
I expect Tesla to produce 2 million or more vehicles this year, assuming conditions aren't too crazy around the world.
7: Tesla $10 billion in share buybacks
There seem to be two camps of people - one camp of people wants to see Tesla invest all its extra money into shares to buy back and create a stronger balance sheet. Others say that excess cash should be used only for new factories and to improve Tesla's products.
I don't see why both camps can't be right. Once Elon Musk and Tesla deem things with the recession are over, they should start buying back stock.
8: Cybertruck will launch in the middle of 2023
Elon Musk gave clarity on the Cybertruck, and this was very important. The reason is that it has been delayed so much already. If it were to get delayed again, most people would think that this product is never going to come to market.
The Cybertruck will be a high margin vehicle, and Elon Musk will personally drive one when they are released.
9: A $25,000 compact car in 2023
Tesla's Model 2 - the compact car - will truly be the end of all EVs and gas cars. It's just a matter of Tesla producing it and reaching volume production. Then the car has to work as reliably as the Model 3 or Model Y for people to buy it and trust it. This compact car could also be the Robotaxi.
10: Project Highland Gets Completed
I am adding this as a 10th catalyst because Project Highland will be very important for the Model 3 - because eventually, the price of the Model 3 is going to have to come down, especially for the standard range model. It's going to have to come below $40,000 eventually. Project Highland will help ensure that the cost of this vehicle also comes down with the eventually and necessary price adjustment.
Gary Black has a $370 price target in the next 6 to 12 months for Tesla, much higher than most people on Wall Street.
What do you think of these 10 catalysts? Will Tesla be able to succeed with these in 2023 and 2024?
In Related News: Tesla's 10,000th Super Charger is Open in Shanghai
$TSLA catalysts 1/26/231/ Investor Day 3/12/ $7,500 EV credit into effect 1Q3/ FSD V11 beta wide release 1Q4/ Megapack revs/profits 1Q5/ TWTR CEO announcement 1Q6/ 450K+ Delivs 1Q7/ TSLA $10B buyback 2H8/ Cytruck launch mid-FY’239/ $25K-30K Compact FY’24$370 PT 6-12 mo— Gary Black (@garyblack00) January 26, 2023
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.