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Shanghai Tesla Gigafactory in China.
Xiaolu Chu / Getty Images
In 2021, the global automotive supply chain is shaken by an unusual shortage of microchips. Everyone from Wall Street analysts to car manufacturers and car suppliers is talking about it. Even car dealers talk about the impact of scarcity on their business.
Everyone is talking about it except
Tesla
(ticker: TSLA). The EV maker is known to be silent on almost everything. CEO Elon Musk is not, however, and a tweet on Thursday seems to indicate that Tesla may be doing better than its competitors. This could affect Tesla’s Q2 earnings, which are due to be published at the end of April.
It wasn’t a long or ambiguous tweet. Only one who thanked suppliers for purchasing Tesla’s critical parts. “It could be important,” says Tesla investor Gary Black. Barron’s… Black is a former Wall Street analyst and former CEO of Goldman Sachs Asset Management. He plays an important role in Tesla stocks, with over 71,000 Twitter followers listening to his views on the electric vehicle industry. The tweet means that “either the shortage of chips did not affect the results for the first quarter, or that it is holding back production. [and] the delivery of the new S / X has been decided, ”says Black.
In the first quarter, Tesla did not produce a single Model S or X. Both vehicles need a product “refresh” – updates to the look, function and interior. The upgrade could have affected production, or the company could simply have allocated a limited number of chips to larger models.
Production cuts and product prioritization are no surprise.
General Motors
(GM) and
Ford Motor
(F) has already called chip shortages a billion dollar obstacle to 2021 profits. GM and Ford, as well as many other automakers, including a Chinese electric vehicle manufacturer.
NIO
(NIO) – We saw how production was impacted by the lack of parts.
Black thinks Musk’s tweet is upbeat, but it could be called a Tesla bull. He has held shares for an extended period of time and has a target price of $ 960 per share. Morgan Stanley analyst Adam Jonas is also optimistic and recommends buying the stock with a target price of $ 880. He weighed Thursday’s spare parts debate from yet another perspective: Tesla may be the beneficiary of the latest developments, but they’re not the only ones.
He sees much broader implications of the chip shortage than just production cuts. “We are seeing a level of limited passenger car stocks that surpasses anything we have ever seen,” Jonas wrote in a Wednesday evening report. Prices for both used and new cars have risen significantly due to a shortage of cars. Dealers tell Jonas that many cars are on the plus list.
And Jonas sees the positive effects of the deficit in 2022. This year “is a year of limited volume and strong price / mix,” the analyst writes, adding that “2022 will be a year of high volume. [and] deferred demand “.
The positives outweigh the negative, perhaps one of the reasons GM and Ford stocks are on fire. Both companies are up more than 40% YTD, easily outperforming comparable returns
S&P 500
and
Dow Jones Industrial Average.
Tesla’s stock isn’t doing that well, though. The stock is down about 4% YTD and 25% from a 52-week high in January. Addressing the chip shortage faster than other automakers could help Tesla stock catch up in recent times.
Tesla shares rose 2.6% to $ 688.50 in recent trading. The S&P 500 is up 0.3%.
Email Al Ruth at [email protected]
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