Don’t look now, but Tesla stock is quietly on the move again. Could it hit $1,000?
Don’t get me wrong. Tesla stock (ticker: TSLA) is still up just 7.3% in 2021, well below the S&P 500’s 19% rise and the Dow Jones Industrial Average’s 14% increase. But after trading sideways for a while, Tesla stock is suddenly making progress: It’s up 21.5% during the past three months, far better than the S&P 500’s 6% rise and the Dow’s 2.7% advance. In fact, with Tesla shares over $750, they could be set to break through resistance on the way to more gains.
The forces that have contrived to keep Tesla stock from outperforming in 2021 could be starting to dissipate, however, according to Wedbush analyst Daniel Ives. These include issues in China regarding safety, increasing electric-vehicle competition, and a chip shortage that has hit the auto industry hard. Sill, with EVs just 3% of the total car market, demand should increase as that number rises to something closer to 10%, Ives argues.
In the short term, all eyes will be on production. Ives expects Tesla to produce 860,000 to 900,000 cars in 2021, on its way to more than 1 million next year. If production can ramp up with the opening of plants in Berlin—expected by the end of the year after delays—and Austin, that number should be achievable.
“We believe the EV market opportunity and green tidal wave will translate into a $5 trillion overall market over the next decade with Tesla a disproportional beneficiary of this broader consumer adoption towards EVs and autonomous over the coming years,” Ives writes.
Of course, bears would argue that as competition heats up, Tesla will find itself hard pressed to keep up, while China could become an even larger issue.
Ives has a $1,000 price target on Tesla, up 32% from Thursday’s close of $756.99. Its shares are little changed at $759.49 on Friday.