Tesla Gets $1,000 Bull-Case Target From Wedbush On China, Europe Outlook

Tesla Inc TSLA is likely to achieve its million delivery units target by 2023, with 2022 not out of the question, Wedbush Securities said — ratcheting up its bull-case price target for the automaker from $800 to $1,000.

The Tesla Analyst: Daniel Ives maintained a Neutral rating on the Elon Musk-led company and increased the price target from $500 to $560.

The Tesla Thesis: Ives noted the steeper electric vehicle adoption curve over the next 18 to 24 months with both Europe and China underpinning growth.

The analyst described China as a “greenfield EV market opportunity.”  Wedbush believes “overall EV sales can potentially double in the region over the next few years given the pent-up demand for EV vehicles across all price points.”

While Tesla’s Shanghai Gigafactory footprint constitutes a “major competitive advantage,” according to Ives, others that stand to benefit from the dramatically expanding demand in 2021 and 2022 include BYD Company Limited BYDDF, Nio Inc NIO, XPeng Inc XPEV, and Li Auto Inc LI. 

Europe’s increased impetus on reducing carbon footprints alongside the European Union’s “regulatory catalysts” should drive consumer focus on EVs, particularly in France, Germany, Italy, and the United Kingdom, the analyst reasoned in a note.“Tesla's Berlin factory build out a major step in the right direction that will increase margins and simplify logistics/deliveries throughout Europe looking ahead,” wrote Ives.

The Wedbush analyst also believes that an incoming Joe Biden Administration could possibly increase EV tax credits and incentives in the United States and would fuel domestic EV adoption starting next year, which would be a positive for Tesla.

Price Action: Tesla shares closed about 1.9% lower at $489.61 on Friday and gained 0.2% in the after-hours session.

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