Tesla set to ride Trump tailwinds over next four years: Mizuho

Investing.comDec 17, 2024 12:51 AM

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Investing.com -- Tesla's swashbuckling rally isn't likely to cool anytime soon as loosing regulations will boost the EV maker's autonomous businesses just as chief executive Elon Musk's close relationship with President-elect Donald Trump paves the way for further growth over the next four years, Mizuho (NYSE:MFG) said in a recent note.

Tesla Inc (NASDAQ:TSLA) jumped 6% on Monday to close at fresh record high.

The "loosening of the autonomous driving (AD) regulatory framework provides more FSD/Robotaxi valuation upside," indicating a favorable environment for Tesla's expansion in autonomous technology, analysts at Mizuho said in a Monday note.

Mizuho upgraded Tesla's rating to outperform and raised its price target to $515 from $230, citing several idiosyncratic tailwinds over the next four years.

Tesla's Full Self-Driving, or FSD, technology could receive regulatory approval at Level 4 by 2025, the analysts said. This would significantly enhance its revenue potential, generating approximately $62 billion in revenue by 2030 -- a substantial increase from less than $1 billion today, they added.

Musk, who threw his weight behind Trump's during the election campaign, is expected to exert influence in the White House, benefiting Tesla.

The new Trump administration's policies, including potential consumer EV tax credit repeals, places Tesla in a favorable position relative to its peers because of the company's lower EV cost structure, the analysts said.

Tesla is expected to outgrow global light vehicle production with a more profitable electric vehicle roadmap, particularly with upcoming models like the low-cost Model Q and Cybercab expected in 2026 to 2027, they added.

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