Tesla could reach 500,000 deliveries in 2020 thanks to strength in China, late push in Europe, US: Wedbush

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Tesla Inc. could achieve its goal of 500,000 deliveries for 2020, a target that was not on 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 U.S., Wedbush analyst Dan Ives wrote in a note published Wednesday. “Based on our initial analysis of demand and the delivery trajectory globally for Tesla in 4Q, it appears Musk & Co. will likely handily exceed Street and internal expectations,” Ives wrote. The analyst is expecting fourth-quarter deliveries to come in closer to 190,000 to 200,00 than the 180,000 he called the ‘line in the sand.’ “Heading into year-end and 2021, we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025,” Ives wrote. “We believe this demand dynamic will disproportionately benefit the clear EV category leader Tesla over the next few years especially in the key China region which we believe could represent ~40% of its EV deliveries by 2022 given the current brisk pace of sales.” Ives is expecting “eye-popping” 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 such as BYD, Nio , Xpeng and Li Auto Inc. , are also “firing on all cylinders.” “If China stays on its current path for Tesla, Musk & Co. could hit one million delivery units globally by 2022 (currently we are modeling 2023 timeframe),” he wrote. An additional boost could come in the form of increased EV credits under the administration of President-elect Joe Biden, he said. Wedbush rates Tesla as neutral with a $715 12-month price target and a bull case of $1,000. Tesla shares were down 0.2% premarket, but have gained 696% in 2020, while the S&P 500 has gained 15%.
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