Analysts at Wedbush have boosted their price target on Tesla Inc (NASDAQ:TSLA) on their belief Donald Trump’s White House win will be a game-changer for EV-maker the over the coming years.
They increased their price target to $400 from $300 and repeated their ‘outperform’ rating. Shares of Tesla traded up 7.5% at $345 on Monday morning.
“We estimate the AI and autonomous opportunity is worth $1 trillion alone for Tesla and we fully expect under a Trump White House these key initiatives will now get fast-tracked as the federal regulatory spiderweb that [CEO Elon] Musk & Co. have encountered over the past few years around full self-driving (FSD)/autonomous clears significantly under a new Trump era,” analysts wrote in a note to clients.
Analysts wrote that they have never viewed Tesla as simply a car company but instead as a “leading disruptive technology global player”.
“Now the next step in this broader Tesla strategic vision begins which is the autonomous and AI era as we believe Tesla remains the most undervalued AI play in the market today,” they added.
“In essence, Musk made a strategic and big bet on a Trump White House win that will be known as a 'bet for the ages' for TSLA bulls as now Tesla and Musk are set to reap the benefits from a new friendlier regulatory era in the Beltway ahead.”
Although the analysts believe a Trump presidency will be an overall negative for the EV industry as it is very likely rebates and incentives will be pulled, they see this as a potential positive for Tesla with some caveats.
Tesla’s “unmatched” scale and scope would give it a clear competitive advantage in a non-EV subsidiary environment. Meanwhile, analysts see likely higher China tariffs pushing away cheaper China EV players like BYD and Nio.
“While there are silver linings around some elevated China tariffs, for Tesla the worry is that Beijing retaliatory policies would then set off a trade war and create geopolitical headwinds for Tesla within this key China market,” they wrote.
“To this point, China is a key market for Tesla and we anticipate some carve outs for both Tesla and Apple on the China tariff front and also expect Musk to have a very big role (not a formal Cabinet position) in a Trump White House and be heavily involved in the China tariff discussions in early 2025.”