Tesla (TSLA) Could Deliver 900K EV Units This Year and 1.3M in 2022 - Wedbush
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Wedbush analyst Daniel Ives reiterated an Outperform rating and a $1,000.00 per share price target on Tesla (NASDAQ: TSLA) as he argues that the company’s EV demand story is just starting to play out.
Ives, a prominent Tesla bull, argues Tesla could deliver near 900,000 units this year in case the company could execute strongly in the second half of the year. This would also pave the way for the EV business to deliver 1.3 million EV cars in 2022.
“In a nutshell, competition is increasing from all angles in this EV arms race which has been an overhang over Tesla and the overall sector, however this is just the start of an EV transformation that will change the auto industry for the coming decades with Tesla leading the charge. With EVs representing 3% of overall autos globally and poised to hit 10% by 2025 there will be much more competition in a massively increasing share of the global auto market. We believe the EV market opportunity and green tidal wave will translate into a $5 trillion overall market over the next decade with Tesla a disproportional beneficiary of this broader consumer adoption towards EVs and autonomous over the coming years,” Ives said in a client note.
The analyst mentions Berling gigafactory delays as a risk that could hamper strong growth. These delays mean that Tesla has to ship Model 3's/Y's from China, which is a “logistical nightmare that is not sustainable.”
“With Tesla looking to further expand its global capacity over the coming years Berlin and Austin are key manufacturing hubs that will be key in the long term Tesla EV story as we see down the road the company producing millions of EV vehicles per year vs. roughly 860k-900k (base to bull case) this year,” the analyst adds.
Finally, Ives addressed the stock underperformance this year, which is a result of many different issues, including China PR/safety issues, FSD regulatory concerns, rising EV competition, and the chip shortage.
“Seeing the forest through the trees we believe Tesla has a number of growth levers into 2022 that should accelerate growth and profitability with global EV demand further inflecting over the next 12 to 18 months. We continue to believe there are many winners in the EV arms race to play this transformational growth opportunity including traditional stalwarts and pure play EV OEMs/supply chain plays with Tesla front and center,” Ives concludes.
Shares of Tesla are up 3.7% YTD.
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