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Tesla Stock Gains As Wedbush Says China Demand Is 'Linchpin' To $1,800 Bull Case Price Target

China will remain a 'linchpin' in Tesla's growth story next year, Wedbush analyst Dan Ives argues, with demand in the world's biggest car market potentially lifting shares by as much as 30%.

Tesla  (TSLA) - Get Tesla Inc Report shares powered higher Tuesday after analysts at Wedbush published a note maintaining their 'outperform' rating on the stock and arguing that China demand will remain a 'linchpin' in the carmaker's near-term growth.

Wedbush analyst Dan Ives, who carries a base target price on Tesla stock of $1,400, with a bull case target of $1,800, said China will account for around 40% of the carmaker's deliveries in 2022. 

The China Passenger Car Association said earlier this month that Tesla sold 52,859 China-made cars in November, a 144% increase from the same period last year. October's tally was 54,931, while September notched a record high of 56,006 units.

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Founder and CEO Elon Musk hinted last month that the Tesla Plaid, the carmaker's new a $140,000 luxury sedan with a top speed of 200 miles per hour, will "probably" be coming to China in early March.

Ives also noted that new gigafactories in Texas and Germany will ease the company's "high-class problem of demand outstripping supply” over the coming years.

“We believe by the end of 2022 Tesla will have the capacity for overall ~2 million units annually from roughly 1 million today,” Ives wrote, “While logistical hurdles will be a near-term cost burden, we importantly believe Tesla has the potential to further expand its auto [gross margin] and profitability profile over the next 12 to 18 months especially with more higher-margin cars being sold and produced in China."

Tesla shares were marked 1.14% higher in early trading Tuesday to change hands a $1,109.35 each, a move that would still leave the stock with a one-month decline of around 2.4%.