Sustainable Energy to Be Highlight of Tesla Investor Day, Goldman Sachs Expects

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Sustainable energy to be a highlight of Tesla investor day, Goldman Sachs expects. The firm reiterated a Buy rating and $200 price target.

Goldman Sachs released a note to clients ahead of Investor Day, which will be held on March 1 at Giga Texas and streamed online. During the event, Elon Musk will unveil Master Plan 3, and analysts expect the company to focus on the energy segment. Most likely, the CEO of the company will discuss what the world needs for the transition to sustainable energy. Goldman also expects topics to include full self-driving (FSD) and the Optimus robot, as well as financial factors, including EBIT margins/opex leverage, and capital allocation.

According to analysts, the Optimus robot will not be the main issue for most institutional investors, especially since a lot of information about it was received during AI Day in the fall of 2022. However, they will still want to get an informational update.

Goldman analysts wrote in a note, “We expect the transition to sustainable energy and the outlook for Tesla’s Energy segment to be one of the most prominent parts of the event (with Elon Musk stating that he will present Master Plan 3 on this topic). Recall that Tesla has said that the TAM for energy could be larger than automotive, and the company is in the process of ramping a 40 GWh ‘Megafactory’ in Lathrop California (roughly 10X its prior capacity) for its utility scale Megapack product. Recall that at Battery Day in 2020, Tesla commented that the world needs roughly 10 terawatt-hours a year of battery production to transition the global fleet to electric vehicles, and 20-25 terawatt-hours per year to transition the world to renewable energy. Tesla recently announced it plans to build 4680 batteries in Nevada, which would be a step towards that goal.”

Tesla also announced on Wednesday that it will open part of its North American charging network, for all electric vehicles. This measure has already been applied in Europe and Australia. Analysts see this as a strategic plus that could boost earnings per share.

Goldman believes Tesla can comment on how it will maintain a strong EBIT margin, but they do not expect Tesla to provide an official EBIT margin target. Tesla also said it will discuss capital allocation when it announces an investor day, and the firm believes this will include capex and a potential share buyback.

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