In a newly released note, Goldman Sachs analyst, Mark Delaney, has made some controversial statements about Tesla. It appears that the firm is changing its view on the California-based electric vehicle manufacturer increasing its price target to $780 per share from $455.
According to the note, their increase was based on the accelerated shift to electric mobility seen in the past months:
“We believe that the shift toward battery electric vehicle (EV) adoption is accelerating and will occur faster than our prior view. We believe that battery prices are falling faster than we previously expected which improves the economics of EV ownership, and there has recently been an increase in regulatory proposals from some jurisdictions to limit or ban the sale of new internal combustion engine (ICE) vehicles entirely in 10-20 years. As a result, in conjunction with our global colleagues, we are raising our outlook for EV adoption and now expect EV to comprise 18% of sales globally in 2030 and 29% in 2035 (with 50% adoption in 2035 in both US and in Western Europe).”
With the demand of electric vehicles accelerating faster than most probably expected, the firm believes Tesla could achieve a “mid to high 20% range share of the EV market” selling up to 20 million cars per year: “If Tesla sustains its mid to high 20% range share of the EV market, then it could reach 15 million units by 2040 (and about 20 million under our upside-case EV market adoption scenario). To the extent that the industry continues to shift toward EVs more quickly than we anticipate, or if Tesla is able to take share in the market, then we believe that there is a possibility Tesla reaches these types of volumes more quickly.”
Following the release of the note, we saw Tesla’s stock grow more that 3% in after-hours trading.