Shares of Tesla (TSLA) rose more than 7% early Monday morning after the electric vehicle maker achieved a record quarterly delivery between January and March, exceeding Wall Street expectations and asking at least one firm to to upgrade share.
The company delivered 184,800 vehicles in the first quarter, Tesla announced Friday. It more than doubled last year’s 88,400 deliveries in the first quarter, surpassing the previous quarterly record of 180,570 deliveries in the fourth quarter of 2020. results.
The delivery of Tesla’s more affordable Model 3 and Model Y vehicles was the vast majority of the total first quarter, and it comes together at 182,780. Tesla manufactures both models at its Shanghai Gigafactory, which was launched just over a year ago began delivering deliveries. In contrast, in the first three months of this year, Tesla handed over 2,020 of its more expensive Model S and X vehicles.
“We are encouraged by the strong reception of the Model Y in China and are rapidly advancing to full production capacity,” Tesla said in a statement.
Production also grew strongly in the first three months of the year, increasing to 180,338 Model 3 and Model Y vehicles combined. This has happened even though automakers across the industry have been struggling with a worldwide shortage of global chips, and because the coronavirus-related disruption worldwide is weighing on supply chains.
Wedbush analyst Dan Ives upgraded the stock to Neutral’s Outperform in the wake of the company’s delivery figures and added it to the list of best ideas. Ives also raised the price target from $ 950 to $ 1000, with a $ 1,300 target at best in the long run. Tesla shares closed Thursday’s session at $ 661.75.
“In our opinion, the 1Q delivery figures released on Friday were a paradigm shift and show that the pent-up demand worldwide for Tesla’s Model 3 / Y is reaching its next growth stage as part of a global green tidal wave that is underway. , “Ives wrote. in a note Sunday. “We now believe that Tesla could exceed the deliveries of 850,000 for the year with a stretch target of 900,000, despite the scarcity of chips and various issues in the supply chain that remain in the automotive sector.”
In 2020, Tesla delivered just under 500,000 vehicles.
While ‘strong’ demand from China and Europe was likely behind the first-quarter delivery, a ‘green tidal wave’ in the US is likely to fuel domestic demand as well, Ives noted. President Joe Biden’s more than $ 2 trillion infrastructure plan included a series of policies that would promote investment in clean energy, and that would benefit companies like Tesla in this arena.
“A dynamic that we believe is significantly underestimated by the street is the current EV tax credit situation that is manifesting locally in the US,” Ives explained. “With Tesla (as well as GM)’s tax ceiling of 200,000 units, there was a price advantage over competitors in the US who could not take advantage of the $ 7,500 EV tax credits.”
“We believe these dynamics are about to change to a large extent for Tesla, as we expect Congress to eventually remove the ceiling on EV tax credits as part of the broader $ 2.3 billion Biden infrastructure plan and it will also possibly move to a credit of ~ $ 10,000 to catalyze the demand from EV consumers, ”he said.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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