Tesla Gets Boost from Biden’s Electric Vehicle Plan


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Tesla (TSLA) shares are getting a nice pop on Monday following much better than expected first quarter delivery numbers, but the real upside to shares in the medium-term will be in part due to efforts out of the Biden administration to get people into electric cars.

Or so says Wedbush tech analyst Dan Ives, who lifted his rating on Monday to Outperform with a $1,000 price target. Ives' bull case price target is $1,300, reflecting optimism on Biden's EV ambitions.

“We are hearing from our contacts in the Beltway that $7,500 tax credit could potentially be $10,000 in terms of a credit and that's going to be a massive catalyst not just for Tesla, but for the EV ecosystem in the U.S.,” Ives tells Yahoo Finance Live.

Currently, the electric vehicle tax credit is $7,500. But it's phased out after an automaker sells 200,000 battery-powered vehicles. Tesla and General Motors (GM) have surpassed the threshold.

But to Ives' point, the Biden administration recently laid out plans to spend nearly $200 billion over eight years to support the surging EV industry. The administration is rumored to be eyeing an expansion of the tax incentive to consumers, which could be a big tailwind to sales at Tesla and its rivals.

The administration is also pledging support to build out 500,000 charging stations and bolster the battery production supply chain.

[Exclusive: Watch Demo of Elon Musk’s Next Big Project]

Even without the help from the Biden camp, Tesla still has the wind at its sails.

Tesla reported Friday that first quarter deliveries came in at 184,000. Wall Street had estimated 172,230. Strength was seen in both the Model Y and Model 3.

Making Tesla's performance more impressive is the ongoing semiconductor shortage that has caused Ford (F) and General Motors to stop production of pickup trucks. To be sure, Tesla's techie vehicles use their fair share of chips.

Says Ives, “Although there has been a painful sell-off for Tesla [stock this year], I think this is just the start of a massive rally of 30% to 40%.”

[See Also: How to Make a Fortune from Tesla’s Secret Supplier]

Read more from Brian Sozzi at Finance.Yahoo.com

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