Tesla leads the ‘biggest transformation in the automotive world since the 1950s’: Wedbush’s Ives

Tesla’s (TSLA) strong rally this week points to more gains ahead, according to Wedbush, as the US electric car maker prepares to transform the auto industry after ending 2021 on a strong note.

Better-than-expected delivery numbers for the fourth quarter prompted investors to remain optimistic about Tesla stock, while the electric car (EV) maker’s new Gigafactory plant in Austin, Texas gears up for production this month.

“We see, it’s a $5 trillion market opportunity in terms of electric vehicles, and it’s the biggest shift in the auto industry since the 1950s,” Dan Ives, chief equity analyst at Wedbush, told Yahoo Finance on Tuesday.

However, Tesla’s revolutionary cause going forward “continues to expand the show,” he added. “Based on all of our work in and around Austin, we think starting next week we’ll be in the early stages of what I think cars are rolling out of the factory,” Ives said.

Although there has been no official announcement of the opening of the Austin plant, all eyes are on there and on Berlin, opportunities that some analysts see could increase the capacity of the electric vehicle manufacturer. Wall Street is expecting an update on the company’s phone call later this month.

“When you look at Austin in particular, it was very smooth in terms of construction,” Ives said.

“Employment has been very strong over the past few months, which is why Musk has placed such a bet on Austin in terms of being the golden gem of the ecosystem,” the analyst added.

Tesla walks on a tightrope

Tesla Inc CEO Elon Musk and Grace Tao, Tesla's vice president of external relations, attend the delivery ceremony of the China-made Model 3 electric vehicles in Shanghai, China, January 7, 2020 Photo taken on January 7, 2020. REUTERS/Ali Song

Tesla Inc CEO Elon Musk and Grace Tao, Tesla’s vice president of external relations, attend the handover ceremony of the China-made Model 3 cars for the electric vehicle (EV) maker in Shanghai, China, January 7, 2020. Photo taken on January 7, 2020. Photo : Ali Song / Reuters

Meanwhile, Tesla’s December sales numbers in China showed another record month of deliveries. The data confirms that nearly half of Tesla’s record production and delivery year came from GigaFactory Shanghai.

Data released by the China Passenger Car Association (CPCA) showed, today, Tuesday, that Tesla sold 70,847 Chinese-made cars in December, the highest monthly rate since it began manufacturing in Shanghai in 2019. Only 245 units were exported to other markets.

The automaker, which weathered supply chain woes rivals to deliver record quarterly sales, has turned the tide in China after the latest backlash at the company’s showroom in China’s Xinjiang — an area at the heart of allegations of genocide in the United States. .

Like other analysts, Ives believes that China remains a growth opportunity for Tesla, and he expects China to achieve “more than 40% of Tesla’s deliveries in 2022”.

China’s electric car market is dominated by domestic brands, including BYD and Wuling – a domestic brand that is part of General Motors (GM). According to Shanghai-based consultancy Automobility, Tesla is the only foreign brand in the top ten.

“It’s a tightrope with respect to China,” Ives said. “But if you look at what’s happening now, the growth story in China is really accelerating in Tesla 2022, which we think equates to about 500 hours per share of the story. It’s something we think the street doesn’t appreciate.”

Wedbush maintains an “outstanding” rating on the stock, with a price target of $1,400 and a bull price target of $1,800.

As more competitors jump into the electric vehicle space, Ives argued that it was “not a zero-sum game” for Tesla.

“Ford will succeed in GM, Lucid, Volkswagen in Europe and of course NIO in China, but overall in EV land is the world of Tesla,” the analyst explained. “Everyone is paying rent at this point and that’s what we are seeing in the near term,” Ives added.

Danny Romero, Yahoo Finance reporter. Follow her on Twitter: Tweet embed

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