Tesla (NASDAQ: TSLA) will be a $1 trillion company by the end of 2021 as it experiences "eye-popping demand" in China, and the recent sell-off presents a "massive buying opportunity," Wedbush said.
In his commentary, Wedbush analyst Dan Ives emphasized that China is a growth pillar for the electric vehicle market. Establishing Tesla's factory in the Chinese market gives it an important competitive advantage over other companies. Tesla is experiencing huge demand in this market, which will lead to even more rapid development. If China continues to show interest in the American manufacturer's cars, it will lead to Tesla being able to reach 1 million delivered units worldwide by 2022.
"If China stays on its current path for Tesla, Musk & Co. could hit one million delivery units globally by 2022. This speaks to our thesis that Tesla will hit a trillion-dollar market cap in 2021 despite this risk-off moment for EV stocks with the bears coming back to life after a long hibernation in their caves over the past year."
Ives also commented on the recent chip shortage. He wrote that the chip supply chain should be normalized as early as March. He added that the recent sell-off of Tesla shares is "a short-term pullback," which presents a "massive buying opportunity," for investors as the world moves into the "golden age of EVs."
"While the stocks and the EV space is clearly going through a digestion period, we view this as a short-term pullback in a multi-year upward rally."
Wedbush has set a target price for Tesla at the end of 2021 at $950.
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Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.