Deutsche Bank Securities Inc. Analyst Dan Galves says he expects Tesla Motors, Inc. (TSLA) to deliver strong production growth and volume growth in 2014 and 2015. He expects the company’s performance to beat Street expectations.
“Consensus right now is assuming that that margin stays flat for the next couple of years,” Galves says. “And based on our view that the company is still getting much more efficient at producing the car, that they will achieve higher production scale, and there are many areas of potential cost-savings in the supply chain that we think that that gross margin has the potential to surprise the Street to the upside, and we think numbers are going to be going up for 2014 and 2015.”
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Galves says demand in China could also spur volume growth for Tesla. Additionally, he expects to see some increased demand when Tesla releases its Model X SUV in late 2014.
“You’ll have the potential to start seeing early prototypes of that vehicle to get people excited — so we still see a really bright future in front of the company,” Galves says.
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