Shares of Tesla (TSLA) - Get Tesla Inc Report edged higher Friday after analysts at Wedbush raised their price target on the electric-vehicle maker to $1,400 a share, betting on China, which is likely to represent 40% of deliveries for the EV maker in 2022.
"We estimate the China story is worth $400 per share to the Tesla story for 2022 and are raising our price target from $1,100 to $1,400 with our bull case remaining $1,800," Wedbush analysts Dan Ives and John Katsingris told investors in a note published Friday.
Wedbush has an outperform rating for Tesla.
"While [public relations]/safety headwinds were front and center in China earlier this year, we have seen this demand trend reverse aggressively in a bullish way for Tesla into year-end, with the company now on a 50,000 monthly run-rate for China into 2022," they wrote.
The note added that Tesla will lead the evolution of the auto industry to EVs and pegged the industry shift to clean energy vehicles at $5 trillion over the next decade.
"We believe [Wall] Street is continuing to digest the massive transformation coming to the auto industry around the EV revolution in 2022 and beyond as this green tidal wave will result in a $5 trillion market opportunity over the next decade with Tesla leading the way," Ives wrote.
Wedbush added that legacy automakers like General Motors (GM) - Get General Motors Company (GM) Report, Ford (F) - Get Ford Motor Company Report, Volkswagen VWAGY and other EV-focused vendors such as Lucid (LCID) - Get Lucid Motors Report, Rivian (RIVN) - Get RIVIAN AUTOMOTIVE, INC. Report and Fisker (FSR) - Get Fisker Report will benefit from this green tidal wave with massive consumer dollars up for grabs in the next decade.
Shares of the Palo Alto, Calif., company at last check rose 0.6% to near $1,103.