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Tesla Stocks Rev 7% Higher As It Posts Record Results



Car transporter carries Tesla Model 3 new vehicles on a freeway in San Francisco bay area-Tesla Stocks-ss-featured

Tesla stocks rose 7% ahead of Easter Sunday, as the electric vehicle manufacturer posted record results for its first-quarter results this year. The company topped Wall Street expectations, which resulted in renewed investor interest. In fact, Tesla even received a bump in its price target from at least one firm covering the stock. 

RELATED: You Can Now Use Bitcoin to Buy Tesla Cars

Record Deliveries Led To Rising In Tesla Stocks

Tesla reported that for the first quarter of 2021, the company produced 180,338 vehicles and delivered 184,800. The EV company managed to break the previous record of 180.570 deliveries despite major production and supply-chain issues. 

Tesla sold 182,780 units of its Model 3 and Model Y vehicles. In addition, they sold 2,020 units of the higher-end Model S and Model X models. The company does not disclose individual figures when reporting sales numbers. 

Wedbush Upgrades Tesla

Meanwhile, Wedbush analyst Daniel Ives upgraded Tesla from “Neutral” to “Outperform” and adjusted the target price from $950 to $1,000. The record-setting quarterly vehicle delivery numbers suggest a “paradigm changer” for Tesla. It also makes the carmaker an attractive target for investors. 

In addition, Wedbush believes that Tesla’s first-quarter numbers show that pent-up demand for Models 3 and Y are hitting their next stage of growth. “While the EV sector and Tesla shares have been under significant pressure so far this year, we believe the tide is turning on the Street and the ‘eye popping’ delivery numbers coming out of China cannot be ignored,” Ives wrote.

He predicted that at this rate, Tesla can exceed its targeted 850,000 deliveries for the year. IN fact, it might even hit 900,000 cars as a stretch goal. All this despite a global chip shortage and various supply chain issues. President Joe Biden’s call from greener technology contributed to the mad scramble for EV parts. 

Efforts in Europe and China Paid Off

Tesla’s blazing start for 2021 credits founder Elon Musk’s directive to beef up operations in Europe and China. The decision paid off handsomely as the global EV market continues to grow. “We believe China and Europe were particularly robust this quarter,” Ives said. While global EV sales are currently at 3%, analysts project it to reach 10% by 2025. “The EV market is just starting to play out as the auto sector is transformed green over the coming years with Tesla leading the charge,” Ives concluded. 

Tesla CEO Zach Kurhorn warned investors earlier this year of possible roadblocks for the quarter. “Specifically for Q1, our volumes will have the benefit of early Model Y ramp in Shanghai. However, S and X production will be low due to the transition to the newly architected products. Additionally, we're working extremely hard to manage through the global semiconductor shortage as well as port capacity, which may have a temporary impact,” Kirkhorn told investors during a call. 

Green Tidal Wave To Increase Demand for Tesla

While Tesla continues to enjoy results from China and Europe, Biden’s call for a greener America will most likely send Tesla stocks flying again. The President’s $2 trillion infrastructure program includes policies directly benefiting clean energy investment. Tesla will likely benefit from the windfall of incentives the government may issue. 

“A dynamic we believe is significantly underestimated by the Street is the current EV tax credit situation manifesting domestically in the US. With Tesla (as well as GM) hitting its 200,000 unit tax ceiling, there has been a price disadvantage vs. competitors within the U.S. not being able to utilize the $7,500 EV tax credits,” Ives said.  

Tesla Stocks Can Benefit from the Infrastructure Plan

“We believe this dynamic is about to change in a big way for Tesla as we expect Congress to ultimately remove the ceiling on the EV tax credits as part of the broader $2.3 trillion Biden Infrastructure Plan and also moving this potentially to a ~$10,000 credit to catalyze EV consumer demand,” he concluded.

Watch the CNBC News video reporting that Tesla delivered a record 184,800 vehicles in Q1 2021:

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