Tesla On Track To Beat Its Ambitious Delivery Target Of 500,000 Deliveries For 2020, Says Wedbush

Tesla Inc TSLA is on track to meet the delivery target of 500,000 units for the year, according to Wedbush analyst Daniel Ives.

The Tesla Analyst: Ives has a Neutral rating on the Tesla stock and a 12-month price target of $715. In a bull-case scenario, the stock could reach the target of $1,000.

The Tesla Thesis: Basing Ives' analysis on demand and delivery trajectory globally, the Elon Musk-led automaker could beat both internal and Wall Street expectations in the fourth quarter.

“With 180k for 4Q the line in the sand, we believe given the underlying strength we are picking up in China as well as a late push in Europe and the US that 190k-200k is well within reach,” the analyst wrote.

Ives theorized that Tesla could achieve the 500,000 delivery number for 2020, which was “not even on the map for the Street going back to the late spring/early summer timeframe.”

The analyst noted that while there are some “logistics speed bumps” throughout Europe that could derail a number of deliveries over the next days, the “theme of the Tesla story and overall global EV demand continues to be around white hot demand coming out of China.”

Wedbush expects EV demand to increase from about 3% of auto sales today to 10% by 2025, which will “disproportionately benefit” the category leader Tesla, especially in China, which could represent about 40% of EV deliveries by 2022.

The analyst wrote that Musk & Co could hit one million deliveries by 2022, and domestic players such as BYD Company Limited BYDDF, Nio Inc NIO, Xpeng Inc XPEV, and Li Auto Inc LI also stand to gain.

Ives also touched on the incoming Joe Biden administration, which is likely to focus on “markedly increasing” EV tax credits and incentives leading to a boost in U.S. electric vehicle adoption next year.

The U.S. move could benefit Tesla, along with General Motors Company GM, Fisker Inc FSR, and others.

Tesla Price Action: Tesla shares closed 0.35% higher at $665.99 on Tuesday.

Related Link: Tesla Incentivizes Year-End Deliveries With 3 Months Of Free FSD

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