UBS battery teardown shows Tesla cells cheaper, ahead of competition
UBS analyst Colin Langan raised his price target for Tesla shares to $230 from $190 after his firm's battery teardown indicated the company's cell costs will reach $111/kWh versus his prior estimate of $148/kWh. The stock closed yesterday down 84c to $353.47. The teardown implies the cost of the Model 3 will be $1,960 lower than previous expectations once the cells are at scale, Langan tells investors in a research note. It also suggests Tesla is ahead of the competition on both the chemistry and the battery management system, adds the analyst. Based on the lower cost battery and the inclusion of non-zero emission electric vehicle credits, Langan boosted his fiscal 2019 earnings per share estimate for Tesla by $5.85 to $3.55. Nonetheless, his new price target is still 35% below the current stock price. As a result, the analyst keeps a Sell rating on Tesla.