Last week, Tesla’s Berlin superfactory hosted an event where Pierre Ferragu, an analyst at New Street Research on Wall Street, said after a tour of the facility that Tesla’s current demand is far exceeding expectations. There are many signs that demand for Tesla’s electric cars is strong, despite a significant increase in their selling price this year. When gasoline prices rose earlier this year, Tesla’s orders in the U.S. reportedly soared to a record high. Tesla even suspended accepting new orders for certain model versions due to an overwhelming backlog of orders.
In a report to clients, Ferragu noted, “Tesla is facing unprecedented demand. Everyone I know at Tesla, and who I can discuss this topic with, agrees that Tesla’s current demand far exceeds what was expected just a few years ago. Electric cars are so popular that for Tesla and its competitors, market share will depend largely on the ability to increase capacity.”
After the tour, Ferragu also said he was impressed with the high efficiency of Tesla’s Berlin superfactory. “Compared to the Fremont plant, the Tesla Berlin plant is significantly more efficient. The logistics within the factory are very simple, and the factory is surrounded by docks on all sides to ensure that parts get to the right place in the factory’s manufacturing chain.”
He also noted that “the factory’s production cycle for a single line is set at 45 seconds, and at full capacity, 10,000 cars will be delivered each week. With a production rate of 45 seconds per vehicle, completing 10,000 vehicles would require more than five consecutive days of uninterrupted time. Most importantly, Tesla is currently producing cars with rear casting (rear casting) and will switch to front and rear casting once the 4680 structural battery pack is in mass production.”
Ferragu has a $530 price target on Tesla’s stock, which implies a lot of upside from the current $275. He even believes that in the long run, if Tesla achieves its goal of producing 20, 000,000 electric cars per year by 2030, Tesla’s market cap is expected to reach $10 trillion, roughly four times Apple’s current market cap.
