To reach Wedbush's bull case price target of $1,500, analysts Dan Ives and John Katsingris say, Tesla needs to ramp up production to solve the "high-class problem" of demand outweighing supply.
"The key to alleviating these issues" centers on "the key Giga openings in Austin and Berlin (resolving the Europe Rubik's Cube logistics currently going on for Musk & Co.) which will alleviate the bottlenecks of production for Tesla globally," Ives and Katsingris said.
Tesla also needs continued success in China to justify its valuation. Wedbush estimates China is worth $300 per share to Tesla's valuation.
China is the “star of the show after headwinds earlier this year,' the analysts said. "In a nutshell, China needs to keep rolling for Tesla after navigating PR/safety issues in the first half. ...
"China demand rebounded in [the third quarter] with massive momentum so far in the month of October (along with Europe) and is a clear indicator of the step up in EV demand taking place globally with China leading the way," Ives said.
The Wedbush analysts currently have an outperform rating and $1,100 price target on the Palo Alto, Calif., company.
Tesla shares at last check were 0.9% higher around $1,034. They've traded on Tuesday up as much as 6.8% near $1,095.
The firm says the electric vehicle revolution is the biggest transformation in the auto industry since the 1950s.
"To reiterate our long-term view of valuation, Tesla we treat as a disruptive technology player, not an automotive stock, given its stronghold on the $5 trillion EV market over the next decade.
"The Hertz deal we believe will be viewed as a tipping point for the EV industry industry as this 100,000 Model 3's/$4 billion+ deal for Tesla speaks to more mainstream adoption for EVs. ..."