Remember when Tesla (TSLA) was having a difficult 2021? Well, those days are long gone now. The EV leader’s past week has been marked by the stock surging to continuous new highs boosted by positive headlines.
First came a blistering Q3 beat, followed by Hertz announcing it would order 100,000 Tesla vehicles by the end of next year.
Hertz was once again the catalyst for further share gains when on Wednesday it became known the car rental company has struck a deal with Uber to supply the ride hailing service with 50,000 Tesla vehicles for drivers to rent. Beginning on November 1, Uber drivers will be able to rent Teslas in a number of cities including LA, SF, Washington DC, and San Diego.
“With the flagship Hertz deal earlier this week kicking it off, this Uber partnership is the largest expansion of EVs on a mobility platform in North America,” said Wedbush analyst Daniel Ives. “We believe this starts to lay the groundwork for the long awaited robotaxi network over the next decade from Tesla with the Uber/Hertz partnership planting the seeds for where this is all directionally heading in our opinion.”
With the expansion into both ridesharing and car rentals, Ives is no doubt the latest developments “massively expand Tesla's and EVs overall addressable TAM.”
The next item to tick off on Tesla’s to-do list, according to Ives, should be to make the company’s FSD (full self-driving) feature “ready for safe deployment.” It’s no pipedream for the company make robotaxis a reality over the next 2-3 years, the 5-star analyst claims.
While currently EVs account for just 2% of all vehicles in the US, given the “rapid electrification” exhibited at such auto luminaries as GM and Ford, by 2025, Ives expects this figure will “approach and potentially exceed” 10%. The 5-star analyst counts the Hertz deal as nothing less than a “tipping point for EV adoption,” and expects other bulk deals will follow.
So great news for the fledgling EV industry, but what does it all mean for TSLA investors? Going by Ives’ $1,100 price target, the analyst expects shares to stay range bound for now (To watch Ives’ track record, click here)
The rest of the Street strikes a more cautious tone; while 11 analysts are positive on TSLA’s prospects, with 6 additional Holds and Sells, each, the consensus is that Tesla stock is a Hold. Most consider the shares overvalued; the $836.50 average price target suggests shares will slide ~24% over the one-year timeframe. (See Tesla stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.