Apple (AAPL) Analyst Hosts Call with EV Battery Expert Yielding 3 Takeaways
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UBS analyst David Vogt reiterated a Buy rating and $142.00 price target on Apple (NASDAQ: AAPL) after hosting a call with a 30 year battery expert to discuss the BEV market. The three key takeaways were:
1) Batteries currently represent the largest cost bucket of a BEV with battery with costs of ~$150 kWh or $7,500. To illustrate his point, he noted by simply driving the battery cost lower by $20 per kWh, an OEM can save ~$1K/unit, or lift margins by ~3% on a $30k vehicle.
2) OEMs have embarked on modestly different platform strategies driven by regional preferences and price points.
3) Over the next decade, choke points such as charging infrastructure will be addressed however the availability of raw materials used in batteries requires monitoring until new technologies like solid state are available.
The analyst stated "Although charging infrastructure is one near term bottleneck, our expert noted that OEMs are incentivized to build charging stations to help drive EV sales going forward, therefore it is unlikely to be a long term headwind. However, our expert spent a considerable amount of time highlighting the importance of the supply of raw materials needed, including graphite, cobalt and nickel. As a sign of the importance of the raw materials, OEMs like Tesla (NASDAQ: TSLA) have been focused on procuring ample supply of nickel."
Shares of Apple closed at $128.96 yesterday.
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