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- According to a Wedbush note, Tesla’s inclusion in the S&P 500 and its “sustained path to profitability” means the bull’s story is now about accelerating demand for electric vehicles.
- As global demand for electric vehicles reaches a tipping point, Tesla could rise 104% in a bullish scenario to $ 1,000, Wedbush said in the note.
- “New projects around Cybertruck and Model Y will further aid growth globally and thus enable Tesla to reach its one million unit delivery likely by 2023,” Wedbush said.
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A tipping point in global EV demand will push Tesla to $ 1,000 in a bullish scenario, representing a potential 104% upside since Friday’s close.
That’s according to Wedbush, who said in a statement on Sunday that Tesla’s inclusion in the S&P 500 and its “sustained path to profitability” means that the bull’s story is now about an acceleration in demand for electric vehicles.
Five consecutive quarters of profitability helped secure Tesla’s place in the S&P 500 earlier this month.
Global demand for electric vehicles is on the rise, Wedbush said, noting that 3% of all car sales are electric. The company expects that number to exceed three times, reaching 10% by 2025.
“This demand dynamic will disproportionately benefit the clear EV category leader Tesla in the coming years, especially in the key region of China which we believe will account for around 40% of its electric vehicle deliveries by 2022,” Wedbush said. .
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According to Wedbush, Tesla witnessed a “Teflon-like demand” during the COVID-19 pandemic, which closed its manufacturing facilities in California for more than a month. Despite the brief closure of the factory, Tesla remains within reach of its 2020 target of supplying 500,000 vehicles.
According to Wedbush, Tesla could even double its current production rate to 1 million vehicles by 2023.
“New projects around Cybertruck and Model Y will further aid growth globally and thus enable Tesla to reach its one million unit delivery likely by 2023,” Wedbush said.
A potential increase in demand that will help Tesla reach those levels includes an increase in tax credits for electric vehicles for consumers and incentives under the presidency of Joe Biden, according to Wedbush.
And while a surge in electric vehicle company start-ups garnered a lot of attention this year, Tesla will be well ahead of its rivals thanks to its manufacturing capabilities, technology innovations and battery and brand awareness, he noted. Wedbush.
However, despite the optimistic outlook of the bullish scenario, Wedbush remains neutral on Tesla shares and has raised its 12-month price target to $ 560 from $ 500, representing a potential upside of 14% since Friday’s close.
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