Tesla (TSLA) could sell 20 million electric cars a year, says Goldman Sachs, offline

Goldman Sachs says Tesla (TSLA) could sell up to 20 million electric cars a year in a new note to customers.

I am extremely bullish on Tesla and electric vehicles, but they were wrong.

Goldman Sachs Note on Tesla (TSLA)

Goldman Sachs analyst Mark Delaney is out today with a new note to customers about Tesla.

The company is turning positive on the automaker and has significantly increased its price target from $ 455 to $ 780 per share.

In the note, they say they are basing their increase on a faster-than-expected shift to electric vehicles:

“We believe the shift to battery electric vehicle (EV) adoption is accelerating and will happen faster than we previously thought. We believe battery prices are dropping faster than expected, improving the economics of electric vehicle ownership, and there has recently been an increase in regulatory proposals from some jurisdictions to limit or ban the sale of new vehicles to internal combustion engine (ICE) fully in 10-20 years. As a result, working with our colleagues around the world, we are improving our outlook for EV adoption and now forecast that EVs will account for 18% of global sales in 2030 and 29% in 2035 (with 50% adoption in 2035 in United States and the West. Europe). “

In this faster shift, they believe Tesla could maintain a “mid-to-high 20% EV market share” and sell up to 20 million cars per year:

“If Tesla maintains its 20% mid-to-high range share of the electric vehicle market, it could reach 15 million units by 2040 (and around 20 million under our favorable scenario for the adoption of the vehicle market). electric). As the industry continues to move towards electric vehicles faster than we anticipate, or if Tesla is able to take market share, we believe it is possible that Tesla will reach these types of volumes more. quickly.

The note pushed Tesla’s stock up more than 3% after the session after the price fell yesterday.

Taking Electrek

I’m a big Tesla bull, but I think these analysts are crazy.

They are jostling each other just to raise their price targets because the stock has already risen due to the announcement of S&P inclusion and are now using flawed logic to justify those increases.

In this case, I think Goldman Sachs is wrong on its two main theories.

The market shares of electric vehicles will be well over 18% in 2030.

I believe there will be a massive shift in demand in the next 5 years where every new car buyer realizes that it would be a foolish decision to buy anything other than a vehicle with an electric powertrain.

However, I do not think the auto production capacity will be ready for this change. Therefore, I don’t think 100% of new cars will be electric in the next 5 years, but I can’t imagine anything less than a 75% market share of electric vehicles by 2030 or 4 times higher than the Goldman’s ridiculous prediction.

As for Tesla’s market share, I don’t think it can maintain a 20% market share as the EV market grows. We’ve seen what happens to Tesla’s market share in markets where other automakers are concentrating their sales of electric vehicles, such as Norway.

This is far from a perfect example as this is a small market that has been heavily targeted by new electric vehicle launches, but the same will happen to a lesser degree in larger markets in as more and more automakers launch compelling electric vehicles.

Honestly, I can’t begin to imagine what kind of logic Goldman Sachs is using to believe that Tesla can maintain that kind of market share in a rapidly growing electric vehicle market with more entries every two weeks and it just comes down to it. ‘a large Tesla bull.

I think Tesla will be closer to 10-15% market share by 2030 and that’s OK. They will sell more than 10 million electric cars a year and will likely be the largest automaker by volume.

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