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- Wedbush's Dan Ives stated that Tesla could rise 35% this year, as China's recent price cuts have been a success.
- According to a Wedbush survey 70% of Chinese consumers said that they had been positively influenced by recent price drops in order to buy a Tesla.
- This could help EV maker Tesla rebound after its stock plummeted 65% in 2022.
According to Wedbush's Dan Ives, Tesla stock could rise 35% this year as its recent price cuts in China have been a great success.
Wedbush conducted a survey of over 500 Chinese consumers who expected to purchase an electric car this year. It found that 76% said they would consider buying a Tesla. This is higher than local competitors like BYD (58.6%), and Nio (48.5%).
Nearly 70% of respondents said that they were positively influenced by recent price reductions to buy a Tesla.
Tesla has cut prices in China twice, despite continuing to struggle with low sales and slow demand. Wedbush conducted the survey shortly after Tesla's Model 3 SUV was priced lower in China and Model Y in Europe. This move could boost sales by 53% according to Bank of America.
Ives wrote in a Thursday note that Tesla's price cuts "are a huge success story so far." China is the heart of Tesla's global growth story. It appears that the price cuts have been well received by EV customers and accelerated their purchasing decisions.
He reiterated his 12-month price goal of $175 for Tesla stock. This implies a rally by 35% from the current levels.
Ives stated in a separate note last week that Tesla's price reductions were a sign of the company becoming more aggressive in light of increased competition in electric cars.
He wrote that he believes all these price cuts could stimulate demand/delivery by 12%-15% globally by 2023. This shows Tesla and Musk are on the 'offensive to spur demand against a softening background." This is a clear signal to European automakers and US stalwarts (GM & Ford) that Tesla will not be playing nice in the sandbox of an EV price war.
After plunging to 65% in 2022, shares have increased 17% since the beginning of the year. The market value was $800 billion.
Analysts say that these losses were caused by rising inflation and a strong US Dollar, as well Elon Musk's chaotic takeover Twitter. These factors have damaged Tesla's brand.
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By: jsor@insider.com (Jennifer Sor)
Title: Tesla stock could rally 35% as recent price cuts have already been a huge success in China, Wedbush’s Dan Ives says
Sourced From: markets.businessinsider.com/news/stocks/tesla-stock-outlook-rally-price-cuts-sales-demand-china-bullish-2023-1
Published Date: Fri, 20 Jan 2023 13:56:43 +0000
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