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After the Shanghai Municipal Government lifted all COVID-related lockdown restrictions, Mizuho analyst Vijay Rakesh restated a “Buy” rating and set a $1,300 per share Tesla price target.
Above: Tesla Model 3 in China (Twitter: Tesla Greater China)
COVID-related restraints in the city of Shanghai impacted Tesla’s Q1 2022 production and delivery numbers. The lockdown also extended to the second quarter and, at last, ended earlier this month. That said, Giga Shanghai had started limited operations towards the end of April.
After touring the Tesla’s Fremont factory extensively, Rakesh determined that the automaker will be able to produce ~1.4 million vehicles this year, just short of Tesla’s estimated target of producing 1.5 million vehicles in 2022 (as reported by Investing.com).
If lockdowns and the global chip shortage hadn’t been factors, Tesla would’ve easily reached the target of producing 1 million vehicles in 2021 with just two functional factories (Fremont and Shanghai). However, as the second half of this year approaches, Tesla should be able to get Giga Shanghai back to its full-scale production speed.
Tesla has also added two more factories for its 2022 production ramp-up — Giga Texas and Giga Berlin. At both of these locations, Tesla is currently only producing Model Y mid-size compact electric SUVs. However, Tesla hasn’t much information about how many vehicles each of these factories are producing (per day or per week) — perhaps this will be revealed on the Q2 2022 Earnings Call or the upcoming Annual Shareholder Meeting.
Above: Tesla Model 3 and Model Y vehicles leaving Giga Shanghai for delivery to Europe (Source: Jay In Shanghai / YouTube, video below)
Tesla has already sent a massive shipment of Model 3 and Model Y vehicles to Europe (drone coverage video below). This demonstrates that Tesla’s Shanghai factory was able to produce an impressive number of cars despite limited production and COVID restrictions. According to Rakshe’s estimates, Giga Shanghai produced around 40K vehicles in April, down from around 51K compared to January 2022 — a ~22% decrease.
“Support for automobile, integrated circuit, biomedical, and other manufacturing enterprises to lead the chain from point to point, realize the coordinated resumption of work of upstream and downstream enterprises in the industrial chain and supply chain, and steadily improve the production rate of enterprises,” Shanghai Municipal Government shared this statement via its official social media account on Sina Weibo.
The city government is keen to resume full-scale production with key manufacturers including Tesla. Therefore, the transition back to normal production levels could be sooner than some suspect at Giga Shanghai.
Just recently, Tesla CEO Elon Musk praised the hardworking team at Gigafactory Shanghai in a tweet, “I have so much respect for the Tesla Shanghai team,” he said.
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Written by: Iqtidar Ali. An earlier version of this article was originally published by Tesla Oracle. Revised update edited by EVANNEX. Source: Investing.com.
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