Tesla (TSLA): Hertz Deal a 'Tipping Point' for EV Adoption and Expect GM (GM) and Ford (F) to Also Benefit; Robotaxis a 'Reality' for TSLA in Next 2-3 Years - Wedbush

October 27, 2021 10:10 AM EDT
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Wedbush analyst Daniel Ives has weighed in on the deal that will see a car rental company Hertz order 100,000 EVs from Tesla (NASDAQ: TSLA), as well as today’s announcement that Uber will make 50,000 of Hertz’s Teslas available for its gig drivers.

Starting November 1, Uber drivers can rent Teslas from Hertz in four major cities across the US, before the program is launched nationwide.

“We believe this starts to lay the groundwork for the long awaited robotaxi network over the next decade from Tesla with the Uber/Hertz partnership planting the seeds for where this is all directionally heading in our opinion. With more consumers looking/preferring EVs, when renting a car (Hertz) or taking a rideshare (Uber) we continue to believe this massively expands Tesla's and EVs overall addressable TAM,” Ives said in a client note.

For Ives, the Hertz deal is a “tipping point for EV adoption,” with not only Tesla benefiting from the massive shift, but General Motors (NYSE: GM) and Ford (NYSE: F) as well. In the meantime, Tesla investors are likely to focus on the FSD and how safe it is.

“Robotaxis [are] a likely reality for Tesla in the next 2-3 years. Today, EVs in the US only represent 2% of overall autos however we believe by 2025 this number will approach and potentially exceed 10% given the rapid electrification we are seeing from the likes of stalwarts such as GM and Ford following Tesla's lead as part of this green tidal wave,” Ives added.

Shares of Tesla are up nearly 3% today to push the total market cap to nearly $1.05 trillion.

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