Chinese Military Restrictions Show Tesla Caught In Middle Of US, China Relations: Wedbush

Tesla, Inc. TSLA is facing a setback in China, as the government has restricted certain state and military personnel from using the electric vehicle giant's vehicles, citing national security concerns.

The Tesla Analyst: Wedbush analyst Daniel Ives maintained a Neutral rating on Tesla with a $950 price target. 

The Tesla Takeaways: The ability of Tesla's sensors to record images of surrounding locations is consistent with the EV maker's footprint from a technological perspective, Ives said in a Friday note.

The location monitoring and surveillance with Tesla's vehicles, the analyst said, sent fears up the chain in the Chinese government and military due to the fact that it is a U.S. company.

Tesla finds itself in a unique position of being caught in the crossfire of tensions between the U.S. and China, he said. 

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This move is not a complete shocker, given Tesla's increasing market share within China and skyrocketing EV demand in this key region, Ives said, adding that it clearly indicates "big brother is watching" the situation closely. 

"Tesla's massive Giga footprint remains a major strategic advantage vs. other EV players (domestic and foreign) as we believe Tesla has potential to be on a 300k run rate of demand in China by the second half of this year." 

TSLA Price Action: At last check, Tesla shares were slipping 0.68% to $648.74. 

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