Tesla Analyst Says It Could Take Half Of $5-Trillion EV Market, Raises Price Target

Tesla Inc TSLA alone could grab half of the $5-trillion electric vehicle market opportunity in the coming years and leave more than 100 automakers fighting for the rest of the pie, according to Wedbush Securities.

The Tesla Analyst: Wedbush analyst Daniel Ives has maintained an Outperform rating and raised the price target to $1,400 a share from $1,100.

The Tesla Thesis: Ives, who has been a longtime Tesla bull, said in a note he expects the Elon Musk-led Tesla to benefit immensely from the continued and massive transformation coming as the entire auto industry eventually goes electric. 

We believe there is $5 trillion of EV auto market dollars up for grabs with Tesla likely to own $2.5 trillion of this pie. We estimate China is worth $400 per share to the Tesla story for 2022 and raising our price target from $1,100 to $1,400 with our bull case $1,800.

— Daniel Ives (@DivesTech) November 19, 2021

See Also: Why Wedbush Sees Tesla Reporting 'Beat Across The Board' With Q3 Earnings

Ives said Tesla is leading the way. The entire ecosystem is set to benefit, including legacy stalwarts such as General Motors Co GM, Ford Motor Co F, Volkswagen Group VWAGY and EV-focused vendors such as Lucid Group Inc LCID, Rivian Automotive Inc RIVN, Fisker Inc FSR, the analyst said. 

“In our opinion based on the current trajectory EVs globally will represent 10% of autos by 2025 and 30% by 2030,” he said. 

Ives said China could represent 40% of Tesla’s deliveries next year, staging a comeback in the world’s largest auto market, where Tesla is heading “into year-end with a ~50k monthly run-rate for China into 2022.”

See Also: GM Has Potential To Trade At Multiples Similar To Tesla, Wedbush Says As It Initiates Coverage With 'Outperform' Rating

“We estimate the China story is worth $400 per share to the Tesla story for 2022.”

Ives On Legacy Rivals: Ives said traditional auto stalwarts such as GM, Ford and VW are due for a re-rating  and estimated GM could be a $100 stock by the end of 2022.

TSLA Price Action: Tesla shares gained 3.71% Friday, closing at $1,137.