Tesla shares (TSLA) are receiving a nice boost this week after a¬†much better than expected first quarter report, but the major upside to shares will be the Biden administration’s efforts to get people to drive electric cars.

This is according to Wedbush analyst Dan Ives, who upgraded his rating of Tesla this Monday to Outperform with a $1,000 target. Ives’ best case price target is a whopping $1,300, reflecting his enthusiasm over Biden’s EV goals.

“We are hearing from insiders that the $7,500 tax credit could possibly turn into $10,000 and that will be a huge change not only for Tesla, but for the whole EV industry,” Ives said.

Currently, the EV tax credit is $7,500. But it goes away after an automaker sells 200,000 vehicles. Tesla and General Motors have gone past that number.

The Biden team has recently announced plans to spend almost $200 billion over the next eight years to help the booming EV industry. The administration is supposedly looking at an expansion of the tax incentive directly to citizens, which would be a big boost to Tesla’s sales and other EV makers.

The administration is also promising support to create 500,000 charging stations and help battery production suppliers.

Even without the help from Biden, Tesla still has a lot going for it.

Tesla reported last week that their first quarter sales were 184,000. Wall Street estimated that number to be 172,230. And strength was seen in both the Model 3 and Model Y.

Making Tesla’s numbers more impressive is the increasing¬†semiconductor shortage that has triggered General Motors and Ford to cease production of trucks.

Says Ives, “Even though there was a sell-off for Tesla this year, I believe this is only the beginning of a massive rally of up to 40%.”

Author: Steven Sinclaire

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