Tesla is grabbing market share in China after price cuts
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Wedbush Securities lifted its price target on Outperform-rated Tesla (NASDAQ:TSLA) to $225 from $175 on increased confidence on demand in China.
Analyst Dan Ives said based on the firm's recent survey work in the field, the expectation is that the China electric vehicle reacceleration story for Tesla is just starting to hit its stride.
"While China demand was a headwind for Tesla in 4Q with the lockdown and macro uncertainty, we are now seeing a noticeable turnaround for Chinese EV buyers favoring Tesla vs. domestic players (BYD, Nio, Xpeng). The price cuts have swayed 3 of every 4 EV buyers in China based on our survey work in China and Tesla's unmatched ability to scale its production operations in China are meaningful to margin stability which are front and center for the Street."
The Wedbush view is also supported by the most recent sale and deliveries reports out of China.
Wedbush thinks production and demand out of the U.S. and China has Tesla (TSLA) on an early path to exceed the expectation that it will deliver 1.8M vehicles in 2023.
Also on Monday, Tesla (TSLA) modestly raised the price of the Model Y in the U.S. in reaction to revisions with the Inflation Reduction Act. However, Wells Fargo said the slight price adjustment is not likely to materially change the challenged EV pricing dynamics.
Shares of Tesla (TSLA) were up 1.38% premarket on Monday to $192.60. The share price is threatening to cross $200 for the first time since the early part of November.