12 Takeaways from 2 Tesla Events: Piper Sandler By Investing.com

Piper Sandler analysts recently hosted two Tesla-related events to delve into the company’s evolving strategies in both the energy storage and self-driving sectors.

The first event was a visit to Tesla’s new “Megapack” facility in Lathrop, California, where analysts gained insight into Tesla’s growing stationary battery business, a key component of its energy division.

The second was a webinar with Elias Martinez, creator of a community tracking system that monitors real-world data from Tesla vehicles equipped with fully autonomous software (FSD).

In a Sunday note to clients, {{0|Piper Sandler}} highlighted 24 key takeaways from these events.

Megapack Takeaways facility visit

1) {{0|Piper Sandler}} notes that Chinese companies are stepping up competition in the stationary battery market, but demand remains strong globally.

2) By 2030, the market will need about 2 terawatt-hours of batteries, a 20-fold increase from the 2023 level.

3) As battery technology matures, hardware could become a commodity and Tesla (NASDAQ: ) won’t be able to compete “on price alone,” the investment bank said.

4) To win contracts, Tesla leverages its entire ecosystem, including software and inverters, instead of focusing on offering the lowest prices.

5) Chinese competitors are largely absent from the US market, in part because they are long-term assets that require ongoing service.

6) Geopolitical factors and the location of factories pose challenges for Chinese suppliers in the US market.

7) A Megapack can weigh over 80,000 pounds, making shipping expensive and highlighting the importance of local production.

8) The new Shanghai facility, which is expected to come online in 2025, will help Tesla compete more effectively in the Asian market.

9) Tesla Energy operates on a project-by-project basis, which leads to fluctuations in quarterly results, making long-term forecasts difficult.

10) Tesla currently imports lithium iron phosphate (LFP) cells and has not commented on potential domestic production using CATL machines.

11) Tesla’s strategy focuses on locating or sourcing production to prepare for different potential market scenarios.

12) Tesla Energy’s long-term gross margin target is in line with other segments at around 20%.

FSD Community Tracker Webinar Takeaways

1) The FSD Community Tracker aims to gauge how fast Tesla’s FSD software is improving under real-world conditions.

2) In the last six months, 107 users submitted data using six different input methods.

3) Data submissions tend to increase within one to two months of the release of new FSD software versions.

4) Followers are generally hardworking, calm, and objective, using FSD regularly.

5) However, biased outliers can be identified and removed from the data, Piper Sandler analysts point out.

6) The latest FSD version (v12.5.x) can travel 220-251 miles between critical disengages, marking an improvement over previous versions.

7) It’s challenging to use these absolute numbers to make direct comparisons between Tesla’s FSD and competitors like Waymo.

8) Determining the exact number of non-disabling miles required for robo-taxi is also difficult.

9) Rather than looking for an exact number, looking at the trend of improvement is more helpful in understanding the progress of FSD.

9) Although v12.5.x has improved, its performance has regressed slightly since its initial release, possibly due to Tesla’s preparation for third-generation hardware.

10) Deactivation trends show that FSD v12.5.x has “definitely improved” compared to previous versions.

11) However, that version’s performance is still weaker since its initial release, analysts point out.

12) This could be because Tesla is preparing v12.5.x for use on third generation hardware.

Analysts at Piper reiterated an overweight rating on Tesla with a $300 price target, urging investors to hold TSLA stock ahead of the upcoming robo-taxi event in October.