The Chinese market has proven to be a game-changer for Tesla Inc., providing the electric-vehicle manufacturer with a strong momentum that is expected to continue into 2024, according to Wedbush analyst Dan Ives.
Ives, a well-known Tesla supporter, expressed his confidence in a note to clients, stating, “With the last week of December now here, we believe Tesla is on track to exceed the 480k delivery units target for the fourth quarter. Strong data from the key China region has given us even more confidence in our bullish call for 2024. We have observed price stabilization globally and an uptick in Tesla prices in various regions, including China, over the past month. This is welcome news for Tesla enthusiasts who experienced a turbulent 2023.”
Tesla’s stock price has reacted positively to this news, rising 0.6% towards an 11-week high in premarket trading on Wednesday. Year-to-date, Tesla’s stock has skyrocketed by an impressive 108.3%, far outpacing the S&P 500 index’s 24.4% gain.
Ives, in a previous note, reaffirmed his outperform rating for Tesla and raised his 12-month price target to $350 from $310. He commended the company for navigating through the challenges it faced in China and referred to it as a “Category 5 storm” that was successfully weathered.
Earlier this year, Tesla encountered a setback when data revealed a sharp slowdown in automobile sales growth in China. Furthermore, the company faced tough competition from domestic Chinese EV manufacturers, which prompted Tesla to reduce prices for some of its models in China.
Despite these hurdles, Tesla managed to make progress by addressing the geopolitical tensions between the United States and China. In May, CEO Elon Musk visited China for the first time in three years and received a warm welcome from Chinese officials.
Looking ahead, Bloomberg reported on Tuesday that Tesla has plans to launch an upgraded version of its Model Y from its Shanghai plant in 2024. However, the company has not yet provided an official response to this report.
Of the 49 analysts surveyed by FactSet, 21 have an overweight or buy rating on Tesla stock, while 21 have a hold rating, and seven have an underweight or sell rating.
In conclusion, Tesla’s success in the Chinese market has significantly contributed to its overall growth. Despite challenges and competition, the company has proven its resilience and ability to adapt. With positive momentum continuing into 2024, Tesla remains an attractive prospect for investors.