Tesla could deliver one million cars by 2022 on 'eye-popping demand' from China, Wedbush says

• Tesla could deliver one million vehicles in 2022 on "eye popping demand" from China as it sees pent-up demand for electric vehicles across all price points, Wedbush analyst Daniel Ives said in a note on Wednesday.
• The US could experience an acceleration in the adoption of electric vehicles in 2021 and beyond if the incoming Biden administration increases EV credits, according to Ives, who sees Tesla hitting its 500,000 delivery target this year, the note said.
• Ives reiterated Tesla's Neutral rating with a price target of $715 and a bull case price target of $1,000, representing potential upside of 7% and 50% from Wednesday's close, respectively.
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Tesla is likely to hit its 500,000 delivery target this year as robust deliveries in the fourth quarter are in part driven by pent-up demand from China, Wedbush analyst Daniel Ives said in a note on Wednesday.

Very few expected Tesla to hit its annual target earlier this year as the electric vehicle manufacturer had to halt production for nearly two months at its Fremont, CA factory due to the COVID-19 pandemic.

"With 180k for 4Q the line in the sand [to hit 500k target], we believe given the underlying strength we are picking up in China as well as a late push in Europe and the US that 190k-200k is well within reach," Ives said.

And by 2022, Tesla could deliver one million units, driven by a major inflection point in global electric vehicle adoption, "eye popping demand" from China, and the potential for increased EV credits from the Biden administration, according to the note. 

If Tesla hit that delivery milestone in 2022, that would be one year sooner than Ives current estimates.

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Electric vehicles to ramp up to 10% of total auto sales by 2025, compared to just 3% today, and China could represent 40% of Tesla's car sales by 2022 as the country is the "heart and lungs" of its demand growth story, Ives said.

"We also believe domestically a Biden Administration taking over in January will likely focus on "markedly increasing" consumer EV tax credits/incentives domestically, which could represent another catalyst in US EV adoption beginning in 2021 with Tesla a key beneficiary," Ives said. 

Ives reiterated Tesla's Neutral rating with a price target of $715 and a bull case price target of $1,000, representing potential upside of 7% and 50% from Wednesday's close, respectively.