Tesla Motors (TSLA) Becoming Key Customer for Battery OEMs
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Price: $162.27 +12.16%
Rating Summary:
23 Buy, 27 Hold, 13 Sell
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
23 Buy, 27 Hold, 13 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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According to Wedbush, Samsung has been qualified as a battery vendor for Tesla (Nasdaq: TSLA). In the view of analyst Craig Irwin, this is important because it shows battery OEMs are taking Tesla seriously.
"We believe that before any substantial supply relationship develops, it is likely Tesla will enter into a contract similar to the Panasonic contract that was inked on July 21, 2009. The October 2011 renewal of the Panasonic contract provides a supply agreement with Panasonic for 80,000 vehicles over four years. We speculate that discussions with Samsung may be a coordinated move, while Tesla negotiates terms with Panasonic for supply of the additional cells needed for additional pack production that is expected to exceed terms of the original agreement," said Irwin.
Due to technical complexities in using multiple cell suppliers, it is unlikely Tesla will settle on a dual supplier arrangement, though it would be a benefit to its supply chain.
"There are significant complexities in using multiple cell suppliers, as cell characteristics and chemistry will have real differences that need to be managed in pack design and assembly. In larger packs, one supplier's cell cannot be simply substituted for another without testing and evaluation to support design changes," said Irwin. "The most important conclusion we can draw is global battery vendors appear to be taking Tesla very seriously, as Tesla is expected to become the most important global battery buyer through the end of the decade."
Wedbush has a Neutral rating on Tesla Motors with a price target of $110.00
For an analyst ratings summary and ratings history on Tesla Motors (NASDAQ: TSLA) click here. For more ratings news on Tesla Motors click here.
Shares of Tesla Motors closed at $122.74 yesterday.
"We believe that before any substantial supply relationship develops, it is likely Tesla will enter into a contract similar to the Panasonic contract that was inked on July 21, 2009. The October 2011 renewal of the Panasonic contract provides a supply agreement with Panasonic for 80,000 vehicles over four years. We speculate that discussions with Samsung may be a coordinated move, while Tesla negotiates terms with Panasonic for supply of the additional cells needed for additional pack production that is expected to exceed terms of the original agreement," said Irwin.
Due to technical complexities in using multiple cell suppliers, it is unlikely Tesla will settle on a dual supplier arrangement, though it would be a benefit to its supply chain.
"There are significant complexities in using multiple cell suppliers, as cell characteristics and chemistry will have real differences that need to be managed in pack design and assembly. In larger packs, one supplier's cell cannot be simply substituted for another without testing and evaluation to support design changes," said Irwin. "The most important conclusion we can draw is global battery vendors appear to be taking Tesla very seriously, as Tesla is expected to become the most important global battery buyer through the end of the decade."
Wedbush has a Neutral rating on Tesla Motors with a price target of $110.00
For an analyst ratings summary and ratings history on Tesla Motors (NASDAQ: TSLA) click here. For more ratings news on Tesla Motors click here.
Shares of Tesla Motors closed at $122.74 yesterday.
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