Tesla / Texas Factory Details Emerge
Tesla Tax Break Proposal Reveals New Details on Texas Factory
Texas has been the expected location for Tesla’s next Gigafactory for a few months now. As the top-selling state for trucks, Texas is a logical choice for Tesla as they prepare to start Cybertruck production next year.
In a proposal released today, new details have emerged on Tesla's potential factory plans in Texas. Tesla is pursuing a location in Travis County, just minutes away from the Austin-Bergstrom International Airport.
Because Tesla is still considering Oklahoma as a potential location for its next factory in the US, Tesla has not actually purchased this property yet. They have, however, reached an agreement securing the option to purchase the land if they choose to move forward with Texas.
“Tesla has an option to purchase this land, but has not exercised it” - Elon Musk
If Tesla chooses not to exercise this right, they will have to forego the premium paid to acquire that right, which is likely an insignificant cost overall. The 2,100 acre site would be similar in size to Tesla's 2,800 acre property for Giga Nevada, and much larger than Giga Shanghai (213 acres) and Giga Berlin (740 acres). In the proposal, Tesla mentions plans to build a 4-5 million sq. ft (~115 acres) manufacturing plant. This would be similar in size to Tesla's Fremont factory which sits on about 400 acres. Tesla would have ample room for expansion with this size property.
Tesla also notes that they would expect construction to begin in Q3-2020 with “commencement of commercial operations” projected for Q4-2021, pending all approvals. Tesla has separately stated they expect to begin production of the Cybertruck in "late 2021".
In the Schedule A1 and A2 Total Investment for Economic Impact filings, Tesla lists the total property investment for 2020 through 2024 at $1.1B . This number includes “New investment (original cost) in tangible personal property” and “buildings or permanent non removable components of buildings” or other investments that will become "qualified property".
Jefferies Increases TSLA Price Target
Early Thursday morning, Jefferies analyst Philippe Houchois increased his Tesla (TSLA) -Get Report price target to $1,200 from $650. Houchois believes shares of Tesla could reach as high as $1,400 in Jefferies upside scenario.
"Tesla remains significantly ahead of peers in product range, capacity and technology. Near term, EV-friendly incentives in the European Union and lower-priced Model 3 support second-half volume, making Tesla more resilient than peers.” - Philippe Houchois, Jefferies
Writing assistance by Pranshu Agarwal