Colin Rusch, senior analyst at Northland Capital Markets, during an interview with Betty Liu on Bloomberg’s “In The Loop,” hypothesized about possible locations for the Tesla Motors Inc (NASDAQ:TSLA)’s Gigafactory, which he believes could be in Reno, given the labor force available, inexpensive housing resources that would allow Tesla Motors to build this plant with relatively low costs, and the comparatively small distance to Fremont, where its car production site is located. He also laid out what he thinks are the growth opportunities available to the company and the reasons why Tesla Motors Inc (NASDAQ:TSLA) is doing so well.
He said that the plant is essential for the cost up program in his projections for Tesla Motors Inc (NASDAQ:TSLA) and that there is about 5 points of gross margin they can get from this battery plant, which is a huge lever that is under-appreciated.
“The one thing that we have been looking at with this company, is their access to capital is unprecedented. And their access to talent is also unprecedented. […] We just have not seen this kind of cheap capital coming into a manufacturing company in our history as analysts,” Rusch said.
Rusch lays this unprecedented resource gain at the feet of the CEO, whose vision, he claims, of building a culture around taking what is impossible and making it real is what draws resources. Tesla Motors Inc (NASDAQ:TSLA)’s ability to capture people’s imaginations and execute them is also credited by Rusch as being a contributing factor.
On the subject of future growth, he mentioned that there are programs that could be growth opportunities for Tesla Motors Inc (NASDAQ:TSLA). They have always taken big projects that are meaningful and structurally change industries. In future, they could work on smart vehicles, battery packs, and thermal matrix. However, Rusch was most concerned with cultural integrity which influences and impacts the quality of work in a company. If a company wishes for a five- or sixfold growth over the next eight years, it must execute at the same high level with a larger group of people. Rusch feels that Tesla Motors Inc (NASDAQ:TSLA) has a good team that will contribute to its growth.
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