With Battery Day and demand recovery on the horizon, Tesla’s 2020 rally may still be in its early days, according to the Wedbush analyst Dan Ives.
The analyst on Monday raised his price target for the automaker’s shares to $1,900 from $1,800 while maintaining a “neutral” rating on the stock. The new 12-month target implies a 15% jump from Friday’s close and would place shares at record highs.
Ives’ bullish outlook helped push shares higher. Tesla gained as much as 7.4% on Monday, notching a record high after reaching peaks in Friday’s session. Shares have soared more than 29% in the past four sessions alone as other analysts have raised their price targets and hyped up Tesla’s Battery Day event on September 22.
Elon Musk is set to reveal a host of “game changing” battery technologies during the event, Ives said. Such innovations are critical to Tesla keeping a lead in the electric-vehicle segment. Analysts think the automaker could announce a battery cell capable of 1 million miles.
If Tesla can also reveal production-cost improvements on Battery Day, it could transform the company into a top battery supplier and widen its total addressable market, Ives said.
Surging vehicle demand in China also drove Ives’ target increase. Wedbush expects sales in the country to accelerate through the end of summer as Tesla ramps up Model Y production in Shanghai. Price cuts in the US and China could further boost demand as the global economic backdrop improves and lockdowns are lifted, Ives said.
He added that China demand was the “linchpin of success” for Musk and Tesla and that the company was back on track to hit its lofty goal of 500,000 deliveries for the year.
“In a nutshell, the success in China continues to be a ‘paradigm changer’ for its EV penetration story over the next decade,” Ives said.
Tesla closed at $1,650.71 on Friday, up roughly 298% year-to-date.