Tesla Inc. said on Monday that it has initiated the delivery of its Shanghai-made Model Y sports utility vehicles to customers in China, Reuters has learnt.
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A representative for the US automaker made the comment in response to a query from Reuters. Back in November, the electric vehicle maker received permission from the Chinese government to start selling the cars and has set a starting price of 339,900 yuan ($52,400).
Earlier this month, Tesla announced the launch of a cheaper variant of the Model Y, bringing its sports utility vehicle’s price closer to that of its Model 3 sedan, the electric-car maker’s least expensive car. The new standard range Model Y is priced at $41,990, only $4,000 more than the entry level Model 3, according to the company’s website.
Tesla shares have skyrocketed 704% over the past year as demand for electric vehicles is on the rise and the stock was included in the benchmark S&P 500 Index. (See TSLA stock analysis on TipRanks)
Last week, Wedbush analyst Daniel Ives ramped up TSLA’s price target to a Street-high of $950 (15% upside potential) from $715, as he reckons that by 2022, 40% or more of Tesla’s overall delivery sales could come from China, which remains the main growth region going forward, followed by Europe, and the US.
“The hearts and lungs of the Tesla bull thesis is centered around China as we have seen consumer demand skyrocket into 2021 not just for Model 3’s,” Ives wrote in a note to investors. “We believe that the China growth story is worth at least $100 per share in a bull case to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months, along with major battery innovations coming out of Giga 3.”
The analyst also lifted his bull case price target to $1,250 from $1,000 but continues to stick to his Hold rating on the stock. He now sees Tesla exceeding the 1 million delivery threshold in 2022 and estimates that the car maker could start to approach 5 million deliveries annually by the end of the decade if global EV demand continues at this pace.
“We believe overall that EVs, which make up 3% of global auto sales today, could reach 5% by the end of 2021 and 10% by 2025,” he added.
The past year’s stellar rally has left the rest of Wall Street analysts mostly sidelined on the stock. The Hold analyst consensus shows 14 Holds, 6 Sells and 7 Buys. That’s with an average price target of $544.42, implying 34% downside potential lies ahead over the coming 12 months.
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