Tesla’s Price Target Raised to $400 at Deutsche Bank

Deutsche Bank analysts provided their views on Tesla, Inc. (NASDAQ:TSLA), raising their price target to $400 from $375.

The analysts boosted their 2023 gross margin estimates for the company as they perform an analysis of the large potential cost benefits from the ramp-up of Berlin and Texas factories and the Inflation Reduction Act’s US battery production credits.

While the company’s gross margin improvement has slowed down this year, due to costs and inefficiencies from Covid-related lockdowns and ramping up new factories, the analysts believe Tesla is still on track to grow this metric in 2022.

More importantly, looking ahead to next year, the analysts now forecast Tesla could lift gross margin by another 300bps year-over-year, thanks to a positive mix shift towards lower COGS-production facilities and benefit from IRA’s battery production credits in the U.S.