- Tesla’s mammoth rally through 2020 has room to run as China demand picks up and Battery Day approaches, Wedbush analyst Dan Ives said Monday.
- The analyst raised his price target for Tesla stock to $1,900 from $1,800, implying a 15% jump to record highs from Friday’s close.
- The automaker is set to reveal new battery technology and cost-cutting advancements on its September 22 Battery Day event. Such innovations could boost Tesla’s standing as a third-party battery supplier, Ives said.
- Rebounding demand in China places the company back on track to reach its goal of 500,000 deliveries this year, he added.
- Watch Tesla trade live here.
With Battery Day and demand recovery on the horizon, Tesla’s 2020 rally may still be in its early days, according to Wedbush analyst Dan Ives.
The analyst raised his price target for the automaker’s shares to $1,900 from $1,800 on Monday 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 is already pushing shares higher. Tesla gained as much as 1.8% in early trading, setting it up to open at an all-time high after breaching previous peaks in Friday trading. Shares have soared more than 20% in the last three sessions alone as other analysts raised price targets and hyped up Tesla’s upcoming Battery Day.
Elon Musk is slated to reveal a host of "game changing" battery technologies during the September 22 event, Ives said. Such innovations are critical to Tesla's lead in the electric vehicle segment, and analysts believe the automaker could announce a million-mile-capable battery cell. 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, the analyst 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 it 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, according to Ives.
China demand is the "linchpin of success" for Elon Musk and Tesla, and the company is back on track to hit its lofty goal of 500,000 deliveries for the year, he added.
"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.
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