Tesla stock gains traction as Wedbush says China ‘linchpin’ in Bull case

You’re here (TSLA) – Get the Tesla Inc report stocks rose on Tuesday after analysts at Wedbush issued a rating now “outperforming” the stock and saying Chinese demand will remain a “linchpin” in the automaker’s near-term growth.

Wedbush analyst Dan Ives, who carries a base price target on Tesla stock of $ 1,400, with a bullish target of $ 1,800, said China would account for about 40% of the automaker’s shipments. in 2022.

The China Passenger Car Association said earlier this month that Tesla sold 52,859 cars made in China in November, an increase of 144% from the same period last year. October’s tally was 54,931, while September hit a record 56,006 units.

Founder and CEO Elon Musk hinted last month that the Tesla Plaid, the automaker’s new $ 140,000 luxury sedan with a top speed of 200 miles per hour, will “likely” arrive in China in early March. .

Ives also noted that new giga-factories in Texas and Germany would alleviate the company’s “high-class problem of demand exceeding supply” for the company over the next several years.

“We believe that by the end of 2022, Tesla will have the overall capacity of around 2 million units per year compared to around 1 million today,” Ives wrote, “Although logistical hurdles will be a financial burden in the short term, we mainly believe that Tesla has the potential to further expand its car [gross margin] and the profitability profile over the next 12-18 months, particularly with more higher-margin cars sold and produced in China. “

Tesla shares rose 1.1% in pre-market trading on Tuesday to indicate an opening bell price of $ 1,105.80 each.

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