The fears concerning demand slowdown for Tesla Inc. (NASDAQ: TSLA) in China may have been ill-founded, an analyst from Wedbush said.
The Tesla Analyst: Daniel Ives maintained an Overweight rating and $175 price target for the Tesla stock.
The Tesla Thesis: About 76% of Chinese electric vehicle consumers are considering buying a Tesla vehicle in 2023, Ives said in a note, citing Wedbush's proprietary survey of 500 customers in mainland China. The uniqueness of the brand, the design of Model 3/Y and battery technology remain three core reasons for Tesla's appeal among consumers, Ives added.
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Tesla's nearest competitors BYD Manufacturing Company Limited (OTC:BYDDY) (OTC:BYDDF) and Nio Inc. (NYSE:NIO) took the second and third places, respectively, Ives noted.
When asked about the impact of the recent Model Y price cuts announced in the first week of January, about 70% responded that it has positively influenced their preference for the vehicle, Ives said. This proves that the price cuts have been a home-run success out of the gates, he added.
Ives reinforced his view that China represents the "hearts and lungs" of the Tesla story and the continued success in the key region is the lynchpin to the "Tesla bull thesis" in 2023 and beyond.
"Our conclusion from this proprietary EV survey is very positive for Tesla on the China front as Musk & Co. have gotten the success story back on track after a shaky few months in this key region," the analyst said.
Even as macro headwinds persist, Tesla is battling domestic players well and holding its China market share, he added.
Price Action: Tesla closed Thursday's session down 1.25%, at $127.17, according to Benzinga Pro data.
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