Tesla Inc TSLA shares are pushing to new highs Monday with the rally set in motion by stellar third-quarter results and are accelerating due to an electric vehicle supply deal.
The Tesla Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and $1,100 price target for Tesla shares.
The Tesla Thesis: Hertz Global Holdings Inc.'s HTZZ order for 100,000 Tesla vehicles by the end of 2022 is the biggest EV order ever placed and is valued at $4.2 billion, analyst Ives said in a note.
Tesla receiving an order of this magnitude highlights the broader EV adoption underway and is part of this oncoming green tidal wave now hitting the US, the analyst said.
The U.S., though playing a catch up to China and Europe in terms of EV demand, is also seeing a big improvement, Ives said.
Related Link: EV Week In Review: Tesla Steals The Show With Stellar Q3, Nio Confirms 'Nio Day 2021' Schedule, Foxconn's EV Push And More
Tesla, the analyst said, is leading the charge and OEMs including Lucid Group Inc LCID, General Motors Company GM, Ford Motor Company F, Faraday Future Intelligent Electric Inc FFIE and many others are chasing this $5 trillion market opportunity over the next decade.
"This Hertz deal is a 'major feather in the cap' or Tesla and speaks to where demand is heading in the EV transformation hitting the auto sector globally," Ives said.
Tesla's long-awaited Giga factory hubs in Austin and Berlin are set to come online over the coming months and should expand Tesla's capacity to roughly 2 million units annually over the next 18 months, the analyst said.
The scale and scope of Giga Austin will enable Tesla to further expand margins markedly over time and will alleviate the supply bottleneck, he added.
Tesla Price Action: At last check Monday morning, Tesla shares were up 5.72% to $961.71.
Related Link: Is Tesla Late To Low-End China EV Party? As XPeng, Volkswagen Now Selling A $25,000 Car In China
Photo: Courtesy Tesla Inc.
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