Tesla has 104% upside potential in bullish scenario as global demand for electric vehicles hits tipping point, says Wedbush

• Tesla’s inclusion in the S&P 500 and its “sustained path to profitability” means that the bull’s story is now about accelerating demand for electric vehicles, according to a note from Wedbush.
• As global demand for electric vehicles hits a tipping point, Tesla could climb 104% in a bullish scenario to $ 1,000, Wedbush said in the note.
• “New designs around Cybertruck and Model Y will further contribute to global growth and thus allow Tesla to reach its millions of delivery units probably by 2023,” Wedbush said.
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An inflection point in global demand for electric vehicles will propel Tesla to $ 1,000 in a bullish scenario, which represents a potential 104% rise from Friday’s close.

That’s according to Wedbush, who said in a note on Sunday that Tesla’s inclusion in the S&P 500 and its “sustained path to profitability” means the bull’s story is now about accelerating demand for electric vehicles.

Five straight quarters of profitability helped secure Tesla’s place in the S&P 500 earlier this month.

Global demand for electric vehicles is increasing, Wedbush said, noting that 3% of all auto sales are electric. The firm expects that number to triple to more than 10% by 2025.

“These demand dynamics will disproportionately benefit the clear leader in the EV category, Tesla over the next few years, particularly in the key region of China which we believe could account for ~ 40% of its EV deliveries. ‘by 2022,’ Wedbush said.

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According to Wedbush, Tesla has seen “Teflon-like demand” amid the COVID-19 pandemic, which has shut down its production plants in California for more than a month. Despite the brief plant shutdown, Tesla remains within reach of its 2020 target of delivering 500,000 vehicles.

Tesla could even double its current production rate to 1 million vehicles by 2023, according to Wedbush.

“New designs around Cybertruck and Model Y will further contribute to global growth and thus allow Tesla to reach its millions of delivery units probably by 2023,” Wedbush said.

According to Wedbush, a potential increase in demand that will help Tesla reach these levels includes an increase in consumer tax credits and incentives for electric vehicles under President Joe Biden.

And while the rise of EV start-ups has garnered a lot of attention this year, Tesla will be way ahead of its rivals thanks to its production capabilities, battery and technology innovations, and notoriety, has noted Wedbush.

Yet despite the bullish outlook for the bullish scenario, Wedbush remains neutral on Tesla shares and raised its 12-month price target to $ 560 from $ 500, which represents a potential rise of 14% from the close of. Friday.

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