Tesla IncTSLA 1.1%is still the leader among the electric vehicle pack even though the competition in the space is intensifying, according to Wedbush Securities.
The Tesla Analyst: Wedbush analyst Daniel Ives maintained his Neutral rating on the automaker and increased the 12-month price target to $950 from $715. The analyst established a bull case target of $1,250 upping it from the previous $1,000 target.
The Tesla Thesis:The Elon Musk-led automaker now exceeds the one million delivery threshold in 2022 and could approach five million deliveries annually by the end of the decade, if global EV demand maintains the current pace, Ives wrote in a note Thursday.
“We believe overall that EVs, which make up 3% of global auto sales today, could reach 5% by the end of 2021 and 10% by 2025,” he said.
Ives termed Tesla’s competitors likeNio IncNIO 1.98%,Xpeng IncXPEV 2.54%, andLi Auto IncLI 2.39% in the key Chinese market as “impressive.”
“There are 150+ auto makers aggressively going after the EV opportunity globally, right now in the EV market we believe it's Tesla's world and everyone else is paying rent.”
Wedbush expects 40% of Tesla’s overall delivery sales would come from China, followed by Europe and the U.S.
“We believe that the China growth story is worth at least $100 per share in a bull case to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months, along with major battery innovations coming out of Giga 3.”
Other positives for the Palo Alto, California-based automaker include a Biden White House and a Blue Senate. The Democrat control over the Senate is a “game changer,” as per Ives.
Increased EV tax credits and consumer incentives coupled with government support is a positive for Tesla,General Motors CompanyGM 6.44%,Amazon.com, IncAMZN 1.21%-backed Rivian andFisker IncFSR 0.94%, as per the analyst.
Tesla Price Action:Tesla shares closed 1.1% lower at $845 on Thursday and gained 0.35% in the after-hours session.
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