Tesla Inc. TSLA,
reach its target of 500,000 deliveries by 2020, a target that was off the radar of Wall Street analysts going back to late spring / early summer thanks to strength in China and a late push in Europe and the US, Wedbush- analyst Dan Ives wrote in a note published Wednesday. “Based on our initial analysis of demand and Tesla’s global supply trajectory in 4Q, it appears that Musk & Co. is likely to easily exceed Street and internal expectations,” Ives wrote. The analyst expects deliveries to come closer to 190,000 to 200,000 in the fourth quarter than the 180,000 he called the “line in the sand.” “Towards the end of the year and 2021, we see a major shift in electric vehicle demand globally, with our expectation that EV vehicles will increase from ~ 3% of total car sales today to 10% by 2025,” Ives wrote . “We believe these demand dynamics will bring disproportionate benefits to Tesla in the coming years, the clear leader in the electric vehicle category, especially in the key region of China, which we believe could represent about 40% of its EV deliveries by 2022 , given the current rapid sales pace. ” Ives expects “dazzling” demand from China in 2021 and 2022 across the board and said Tesla’s flagship Giga 3 footprint is a major competitive advantage, as domestic companies like BYD, Nio nil,
Xpeng XPEV,
and Li Auto Inc. LI,
are also “firing on all cylinders.” “If China stays on the current path for Tesla, Musk & Co. could reach one million units of delivery worldwide by 2022 (we are currently modeling the 2023 timeframe),” he wrote. An additional boost could come in the form of increased EV credits under President-elect Joe Biden’s administration, he said. Wedbush rates Tesla as neutral with a price target of $ 715 for 12 months and a bullcase of $ 1,000. Tesla shares have rolled back early premarket losses to gain 1.1%, and are up 696% in 2020, while the S&P 500 SPX,
has won 15%.