Tesla Motors, Inc. (NASDAQ: TSLA) – Tesla analyst sees conciliatory approach for Chinese regulators, EV ‘Golden Age’ ahead

Tesla Inc (NASDAQ: TSLA) has been advised by the State Administration of China for Market Regulation regarding quality issues with respect to EVs sold in China.

An analyst at Wedbush sees the problem as a spot on Tesla’s radar and is instead focusing on the automaker’s overall picture.

Tesla analyst: Daniel Ives maintained a neutral rating on Tesla with a price target of $ 950, with a high cash target of $ 1,250.

Tesla’s Thesis: Tesla’s approach to adopting a more conciliatory tone with China is encouraging, Ives said in a note on Tuesday.

An impasse with Chinese regulators will be the last thing a Tesla investor would like to see, given that the company’s sales in China more than doubled in 2020, despite the COVID-19 pandemic and are on their way to account for about 40% of its sales volume in 2022, said the analyst.

Related link: Tesla reaches a high price of $ 1,200: ‘The fireworks are not over yet’

The regulatory agency slapped Tesla in the face, asking the company to focus on strengthening internal management around quality controls in the country, he said.

“As such, Tesla ‘sincerely accepted the guidance of government departments and reflected deeply on the shortcomings’, a smart move rather than fighting any problems,” said Ives.

Tesla need to work around any regulatory and quality issues in China in the coming months, as an “golden age” of EVs is on the horizon, the analyst said.

“With some contained recalls and quality issues for Tesla, we believe that this is more ‘growing pains’ as the company is seeing an EV demand path, even beyond bull’s expectations for 2021 in this key region.”

TSLA Price Action: At the last check, Tesla’s shares were down 2.32% to $ 843.41.

Related link: Tesla apologizes to China State Power Company after viral video

Photo courtesy of Tesla.