One analyst says Tesla may grow another 71% from current levels as it unlocks more growth potential in China


Reuters

  • Tesla’s meteoric rise is set to continue as it puts capital on strong growth from China, according to Wesbush.
  • In a note published on Sunday, Wesbusch said that in a bull case, Tesla could jump another 71% to $ 3,500 from current levels.
  • Pent-up demand for its cars in China, along with recent price cuts, has made Tesla to take advantage of “a perfect storm of demand”, according to Wesbusch.
  • For more stories visit the Business Insider homepage.

Tesla’s 390% year-over-year rally has shown no signs of slowing down, and according to Wesbusch: Get used to it.

In a note published on Sunday, Wesbusch said that in a bull-case scenario, Tesla could take another jump from current levels of $ 71 to $ 3,500. Wesbush’s bull-case target was $ 2,500.

According to Wesbush, the catalytic growth in Tesla’s shares from $ 3,500 to $ 3,500 is strong growth from China.

The pent-up demand for the Model 3 in China, along with recent price cuts, has created “a perfect storm of demand” to capitalize on Tesla, Weisbush said.

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In the first year after its Giant 3 went live in Shanghai, Tesla is poised to deliver 150,000 Model 3 units. And according to Wasbusch, the Model 3 sold in China will have higher margins than the Model 3 sold in the US and Europe, which could “clearly raise the profitability profile” for Tesla going forward.

China can make up 40% of Tesla’s total sales by 2022, if the company is able to meet demand, Wesbush said.

Finally, according to Wesbusch, Tesla is “back on track” for delivery of 500,000 cars this year despite the COVID-19 epidemic, and could eventually deliver 1 million units per year by 2023.

In addition to strong demand from China, Tesla’s upcoming Batter-Day event on 22 September may surprise investors, Wesbush explained.

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New inventions and the development of “game changing” batteries mean that Tesla may be close to announcing a “million mile battery”, a battery that could potentially run for decades and withstand all types of weather and terrains May, Wesbush said.

Wesbush is neutrally rated on Tesla and has a 12-month price target of $ 1,900, representing a downside of 7%.

Tesla shares jumped 4% in trades on Monday morning, ahead of the company’s planned stock split on August 31.

Last week, Tesla overtook Walmart in market value. The company is now the ninth most valuable US stock.

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tsla chart 12.JPGMarket insider

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