Tesla Inc. (TSLA) - Get Report shares powered to a fresh record high Wednesday, fueled by a price target boost from analysts at Morgan Stanley and the potential for Democratic control of Congress that would favor legislation for the electric car industry.
Morgan Stanley analyst Adam Jonas lifted his price target on Tesla stock by $270, to $810 per share, as he dubbed Elon Musk's clean-energy carmaker the industry's "chosen one" thanks to its "people, its technology, business model and access to capital".
"Furthermore, it is important to note that the company has no entanglement with the environmental liabilities that burden legacy competition," Jonas noted. "Put it all together and we believe Tesla's business model can unlock recurring mobility services revenue faster and more profitability than the competition."
Tesla shares were marked 3% higher in early trading Wednesday to change hands at $756.98 each, after hitting a fresh record high of $761.50 each that would value the group at more than $717 billion.
The potential for Democratic control of the Senate, following run-off elections in Georgia, is also providing support for Tesla and the broader electric vehicle sector following the appointment of former Michigan Governor Jennifer Granholm as Energy Secretary by President Elect Joe Biden.
Granholm, who has close ties to the auto sector following her two terms as Governor, will need Senate confirmation to take up her post and work alongside Transportation Secretary appointee Pete Buttigieg.
Biden has promised to build 550,000 electric vehicle charging stations while creating some 1 million new jobs through investment in clean energy research.
One of Tesla's earliest investors, in fact, was the Energy Department itself, which issued a $465 million loan to Musk's nascent carmaker in 2010 to "produce specially designed, all-electric plug-in vehicles and to develop a manufacturing facility in Fremont, California to produce battery packs, electric motors, and other powertrain components for powering specially designed all-electric vehicles", according to the government's website.
Morgan Stanley's Jonas sees the further development of production facilities in Austin, Texas, as supportive for Tesla's manufacturing pace over the near-term, with an upgraded total 2023 forecast of 1.7 million units and a 2030 estimate of 5.2 million units, a 38% increase from his prior estimate.
"We struggle to find a more innovative company with the ability to execute against the high degree of difficulty inherent in sustainable transportation and energy at scale," Jonas said. "We reckon its's a rather short list."