Tesla has a 'remarkable' battery technology that one analyst says has been ignored by Wall Street
- Tesla's new aluminum cooling radiators in Model 3 batteries have been largely overlooked, an analyst says.
- Berenberg, a German investment bank, is one of the most bullish on Wall Street - and isn't worried about "production hell."
- Follow Tesla's stock in real-time here.
Most of Wall Street is focused on Tesla's race to build enough Model 3s and how the company may soon need to raise more cash.
But one firm - Germany's Berenberg - has noticed something else Wall Street may be missing: a crucial battery technology that it says could be a game changer.
"Among the key improvements made to the already industry-leading thermal management system in the Model S/X are the new aluminum cooling radiators that surround each individual cell in the Model 3 pack," Alexander Haissl, an analyst at the firm, told clients in a note he wrote Wednesday after taking a tour of Tesla's so-called Gigafactory.
"This technology, which helps to minimise battery degradation and reduce charging times, is a remarkable piece of system engineering that has been largely completely overlooked as a key competitive advantage for Tesla compared to other OEMs offering more primitive solutions."
Haissl, a long-time Tesla bull, has one of the highest price targets on Wall Street at $500. That's 30% above where shares were trading Thursday morning, and well above the $314 consensus, according to Bloomberg. He's not worried about ongoing "production hell" and says the battery issues are easily rectified by hand.
"To Tesla's benefit, this zone is relatively easier to convert into a manual process due to limited human hazards," he said. "With higher output currently possible simply by increasing headcount, zone two is no longer a volume-limiting step in the assembly process."
The company is actively acquiring new manufacturing equipment from the German city of Grohmann in order to speed up some of the processes involved with producing the Model 3. However, the machines won't arrive until the third quarter.
Because of the unexpected hiccups, the company erected a massive tent next to its Fremont, California plant - where it produces the Model 3 - to speed up production and hit CEO Elon Musk's goal of 5,000 vehicles per week. Currently, that number is at about 2,831 per week, Bloomberg estimates.
Shares of Tesla have had a choppy start to 2018, which has seen Musk warn short-sellers that the "burn of the century" is coming soon.
Tesla is expected to report second-quarter delivery numbers in the first week of July.
