Tesla could increase 30% on Chinese demand next year, Wedbush says

Tesla could increase 30% on Chinese demand next year, Wedbush says

Shares in the electric-vehicle maker could gain nearly 30% over the next 12 months, analyst Daniel Ives wrote in a note. He expects component shortages to ease next year, allowing Tesla to better meet growing demand in China, while new factories in Austin, Texas and Berlin should alleviate global production bottlenecks.

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Highlights

  • The stock slid 0.8% in early trading Tuesday, breaking a four-day rally.

  • “The linchpin to the overall bull thesis on Tesla remains China, which we estimate will represent 40% of deliveries for the EV maker in 2022,” Ives said, reiterating his outperform rating and $1,400 price target.

Argus Research boosted its price target for Tesla’s stock on Tuesday, lifting it to $1,313 from $1,010 and reaffirming a buy rating. Sees the EV-maker as the industry’s “undisputed leader,” even in the face of “growing competition.”

Tesla shares have had a stellar year, with a 55% gain through Monday’s close that propelled the company’s market value above $1 trillion. Chief Executive Officer Elon Musk has been offloading stock since November, and said on Twitter last week that he is “almost done” with a target of reducing his stake by 10%.

Wedbush’s Ives estimates that by the end of 2022 Tesla will have capacity to produce about 2 million cars a year, up from around 1 million today.

“Right now Tesla has a high-class problem of demand outstripping supply,” he said.

(Updates with regular hours trading and Argus analyst commentary.) Story continues

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