After the electric car maker Tesla, Inc. (TSLA) has slowed this year. Wiggling among a growing list of problems, ranging from a National Highway Traffic Safety Administration (NHTSA) investigation to Supply chain Emissions, Tesla stock has made stagnant strides, rising only about 7.3% this year.
The central theses
- Wedbush analyst Daniel Ives has forecast a price target of $ 1,000 for shares in electric vehicle pioneer Tesla.
- Tesla stock failed to replicate its spectacular gains from last year after running into multiple troubles for most of this year, from regulatory scandals to supply chain issues.
- Tesla will be the biggest beneficiary of the global push toward electric vehicles, according to Ives.
Wedbush securities analyst Daniel Ives, however, is betting that the company’s stock will slide back into Ludicrous Mode. He recently put out a note saying his Outperform Valuation for the share and assignment of a Course target from $ 1,000.
“We believe the electric vehicle market opportunity and the green tide wave will result in a total market of $ 5 trillion over the next decade, with Tesla benefiting disproportionately from this broader consumer acceptance of electric vehicles and autonomy in the coming years,” wrote Ives in a recent communication.
In other words, Tesla will be the biggest winner in a world transitioning from gasoline to electric vehicles. Ives has forecast a production target of 860,000 to 900,000 for Tesla this year and more than 1 million for next year. Tesla does not offer production Orientation aid in his calls to win.
In the past few years, as Tesla expanded into new markets, Tesla scaled its manufacturing capabilities and opened plants in Shanghai and Austin. Last year the production rose from tens of thousands of cars a year to nearly 500,000 cars.
This increase in production numbers, however, comes at a price. While regulatory issues plagued Tesla’s growth, this year has been particularly challenging for the company. It faces problems in several regions.
In addition to dealing with authorities in the United States, Tesla is also struggling with Chinese regulators. China is set to become Tesla’s largest market in the future. But the company’s entry there was anything but coincidental.
A year after launching its Model 3 sedan in China, Tesla is busy quelling security scandals and privacy concerns. For example, security issues reported on Chinese social media resulted in Tesla officials being summoned by five government agencies in February. They called on the company to “strictly adhere to Chinese laws and regulations, strengthen internal management and implement the company’s quality and safety regulations.”
Cameras in the company’s cars have also raised safety concerns in a government-controlled society. The tide of negative publicity has severely affected Tesla car sales. According to the numbers released in August, they slumped to 8,621 in July – a 69% decrease from the previous month’s numbers.
Tesla is also battling supply chain issues resulting from the pandemic, such as chip shortages. During a conference call in June, Tesla CEO Elon Musk said scarcity was a “determining factor” in the company’s production. The company already has delayed production due to supply chain issues on several expected models in his stall. The Berlin production facility, which was due to open on July 1st of this year, has also been delayed. While Tesla reported record profits in June, the problems and delays are likely to affect its own Bottom line in the near future.
Ives remains unfazed, however, and values his regulatory tailwind in the form of loans and government pushes for electric vehicles to make Tesla more attractive to investors. “Looking at the forest through the trees, we believe Tesla has a number of growth levers by 2022 that should accelerate growth and profitability as global demand for electric vehicles continues to shift over the next 12 to 18 months. Arms race to capitalize on this transformative growth opportunity, including traditional legs and pure EV OEMs / supply chain games with Tesla at the forefront, ”he wrote.