Image: Jean-Luc Andriot
In recent years, Tesla (NASDAQ: TSLA) has confirmed its status as one of the few electric vehicle manufacturers ready to challenge the decades-old reign of combustion-powered vehicles. Tesla is now the leader in the EV sector, gradually replacing ICE cars.
According to a report by the Korea Automotive Technology Institute (KAII), global EV sales have exceeded 3 million units in the first three quarters of 2021, a run rate that puts it on course to break 4 million units a year for the first time ever, reports finance.yahoo. In turn, BloombergNEF is even more optimistic and expects global sales of passenger electric vehicles this year will reach 5.6 million units, representing 8% of new car sales.
Wedbush Securities predicts that Tesla alone could capture up to 50% of the $5 trillion electric vehicle market in the coming years, while the rest of the manufacturers will fight for the remaining 50%. With this in mind, Wedbush analyst Daniel Ives maintains his "Outperform" rating, raising his price target on Tesla from $1,100 to $1,400 per share, with a bull case of $1,800.
Tesla has proven itself in a competitive electric vehicle market that is now competing with traditional ICE vehicles. China, which is the world's largest auto market, is the "linchpin to the overall bull thesis on Tesla." Tesla's sales in China accounted for nearly half of U.S. sales in Q3 and continue to grow every quarter. The manufacturer reported $3.11 billion in electric vehicle sales in China in Q3, representing 48.5% of its $6.41 billion in U.S. sales in the same period. Model 3 and Model Y are now among the top three selling electric vehicles in China.
In every quarter of 2021, Tesla was able to increase its profits, which was mainly due to lower costs and increased sales. Analysts expect this momentum to continue into the next year with increased production, demand that is set to rise, and new factories set to open soon. If Tesla can make improvements in its supply chains in 2022, it will benefit even more.
Earlier this week, the manufacturer filed for approval for the first phase of its planned Giga Texas in Austin. Approval for Giga Berlin is also pending shortly, although difficulties with local approval may result in further delays. However, even without these catalysts, Tesla is dominating everyone else in the auto market.
© 2021, Eva Fox | Tesmanian. All rights reserved.
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