Tesla PT hiked to $400 at Global Equities Research on ‘accelerating demand’

Analysts at Global Equities Research raised their Tesla (NASDAQ:) price target from $340 to $400, citing the uptick in demand for the company’s electric vehicles (EVs).

“TSLA is experiencing accelerating demand triggered from $7,500 Point of Sales EV Credit, which reduces the Vehicle Price by another $7,500,” analysts wrote.

Global Equities Research’s new target price implies a potential upside of more than 53% from Tesla’s last closing price.

Analysts said the demand for Tesla’s vehicles, particularly Model 3 and Model Y, has been “extremely strong” over the past two weekends as the $7,500 price reduction for these cars causes a “solid customer pull.”

“Starting around May 03, 2024, many potential car buyers somehow came to know about that TSLA reduces the Price of Model 3 and Model Y by another $7,500 at the time of purchase,” analysts wrote.

“Customers started to consider Point 3 above as instant rebate, and started to buy TSLA vehicles initially off the inventory,” they added.

Global Equities Research noted that Tesla has simplified the ordering process by developing in-house software. This streamlines the entire workflow from placing an order to processing the point-of-sale credit for EVs, reducing the vehicle price, and integrating with the IRS Inflation Reduction Act portal.

On the flip side, the dealerships selling Tesla’s competitor EVs first raise the prices before reducing them by the Point of Sales EV credits, according to the equity research firm.

“Customers do not appreciate these dealerships’ gimmicks,” it pointed out.

“TSLA has not only reduced the pricing on their vehicles, but also offer Point of Sales Credits of $7,500 instantly by reducing the price of vehicles by another $7,500 of already reduced Vehicle price.”