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Tesla (NYSE: TSLA) stock price has extended the upside momentum in post-election trading as Joe Biden has won the presidential race. The new president is deemed to support clean energy policies, with expectations that the US will invest $2 trillion in clean energy.
Shares of the largest electric vehicle company rose 10% in the past five days, bringing the year to date gains to 410%. The latest financial results and aggressive growth plans have been contributing to the share price gains. The market analysts have also praised its deliveries targets as the company claims that it on track to deliver 500K vehicles this year despite coronavirus-related disruption.
Joe Biden’s clean energy policy will support electric vehicle
Joe Biden plans to invest $2 trillion in clean energy which includes solar, renewables, and electric vehicles. Tesla is likely to benefit from pro-clean energy policies as it is the largest electric vehicle producer.
The Solar Energy Industries (SEIA) CEO Abigail Ross Hopper said a Biden presidency would “advance clean energy incorporating environmental justice”, while American Council on Renewable Energy CEO Greg Wetstone calls it a historic moment for clean energy future.
Tesla stock rally is backed by robust operational and financial results
Tesla remained profitable in the past five consecutive quarters while its operational performance has also topped analysts’ expectations.
Its vehicle production jumped 51% year over year in the September quarter. The company has delivered 139,593 vehicles during the third quarter, with expectations to hit the 500K deliveries mark this year compared to analysts’ expectations for 476K deliveries.
Strong demand for Tesla’s products in China is among the biggest catalyst for future performance. This is because the latest report from Morgan Stanley shows that electric vehicles will account for 20% of overall Chinese vehicle sales by 2025.
Meanwhile, Tesla has already established a factory in Shanghai and it recently requested permission from the Chinese government for Model Y production in Shanghai.
Wedbush Securities has provided a price target of $800, calling China the “hearts and lungs” of the Tesla demand growth story playing out over the next year.