Analyst predicts Tesla price target of $ 1,000 (TSLA)
After posting a stunning 508.3% gains last year, shares of electric car maker Tesla, Inc. (TSLA) have slowed this year. Oscillating under a growing list of issues ranging from a National Highway Traffic Safety Administration (NHTSA) investigation to supply chain issues, Tesla’s stock has made hesitant progress, increasing only about 7, 3% this year.
Key points to remember
- Wedbush analyst Daniel Ives has forecast a price target of $ 1,000 for shares of electric vehicle (EV) pioneer Tesla.
- Tesla’s stock has failed to replicate its spectacular gains from last year after getting bogged down in multiple issues, from regulatory scandals to supply chain issues, for most of this year.
- Ives says Tesla will be the biggest beneficiary of a global push towards electric vehicles.
But Wedbush securities analyst Daniel Ives is betting the company’s shares will go into ridiculous mode again. It recently issued a rating reiterating its outperformance rating for the stock and assigning a price target of $ 1,000.
“We believe that the opportunity of the electric vehicle market and the green tidal wave will translate into a global market of $ 5,000 billion over the next decade, with Tesla a disproportionate beneficiary of this wider consumer adoption towards electric and autonomous vehicles in the years to come, ”Ives wrote in a recent memo.
In other words, Tesla will be the biggest winner in a world in transition from gasoline-powered vehicles to electric vehicles. Ives has forecast a production target of between 860,000 and 900,000 for Tesla this year and more than a million for next year. Tesla does not provide production advice in its earnings calls.
In recent years, as it expanded into new markets, Tesla has increased its manufacturing capabilities and opened factories in Shanghai and Austin. It went from tens of thousands of cars a year to almost 500,000 cars last year.
A cost for expansion
This increase in production numbers, however, came at a cost. While regulatory issues plagued Tesla during its growth, this year has been particularly difficult for the company. It faces problems in several geographic areas.
In addition to dealing with US authorities, Tesla also faces Chinese regulators. China is expected to become Tesla’s biggest market in the future. But the company’s entry there was no accident.
A year after launching its Model 3 sedan in China, Tesla is working to quell security scandals and privacy concerns. For example, security concerns reported on Chinese social media led Tesla officials to be summoned by five government agencies in February. They called on the company to “strictly adhere to Chinese laws and regulations, strengthen internal management, and implement the company’s quality and safety regulations.”
Cameras in the company’s cars have also created security concerns in a company under government surveillance. The barrage of negative publicity has taken its toll on Tesla car sales. According to figures released in August, they fell in July to 8,621, down 69% from the previous month’s figures.
Tesla is also grappling with supply chain issues resulting from the pandemic, such as chip shortages. During an earnings call in June, Tesla CEO Elon Musk said the shortage was a “determining factor” in the company’s production. The company has already delayed production of several models planned for its stable due to supply chain issues. Its Berlin manufacturing plant, which was scheduled to open on July 1 of this year, is also delayed. While Tesla announced record profits in June, the problems and delays are expected to have an effect on its results in the near future.
But Ives remains unfazed and is banking on his regulatory backs, in the form of credits and government measures in favor of electric vehicles, to make Tesla more attractive to investors. “Seeing the forest through the trees, we believe Tesla has a number of growth levers through 2022 that are expected to accelerate growth and profitability as global demand for electric vehicles weakens further over the years. Next 12 to 18 months. We continue to believe that there are many winners in the EV Arms Race to play this transformational growth opportunity, including traditional mainstays and pure EV OEM / supply chain play with Tesla up front. and in the center, ”he wrote.