Joe Biden's climate plan is great news for Tesla, Wall Street analyst says

Graham Rapier
·3 min read
Tesla BLM Biden flags trump
A Tesla flying "Black Lives Matter", Joe Biden, and American flags drives past President Donald Trump's golf club, Trump National, on August 30, 2020 in Sterling,Virginia. SAMUEL CORUM/Agence France-Presse/AFP via Getty Images
  • Tesla is the biggest potential beneficiary from Joe Biden's climate-change plans, according to one Wall Street analyst.

  • Garrett Nelson of CFRA Research says Biden's proposed acceleration of charging points and EV tax credits are great news for Tesla. 

  • Biden's plans to reinvigorate domestic auto manufacturing could also be helpful in courting voters in all-important Midwest states that are home to many factories. 

  • Visit Business Insider's homepage for more stories.

Joe Biden's plan to subsidize electric vehicles and significantly accelerate the rollout of charging stations in the United States could be a boon for Tesla, according to one Wall Street analyst.

Garrett Nelson of CFRA Research told Yahoo Finance on Friday that the former VP's plan could increase the market share of battery-powered cars to as much as 25% of new car sales by 2030, up from a paltry 2% currently.

"Tesla would be one of the biggest winners as an electric vehicle pure play, because EVs would be very heavily subsidized under a Biden administration," Nelson, who has a bullish $550 price target on shares of Tesla, told the site.

As part of his charge to create 1 million automotive jobs, Biden has planned an aggressive increase in the number of electric-vehicle charging stations to 550,000 from current levels around 27,000. It's a trend already in play, with even oil companies and traditional automakers fueling a wave of investment in network operators.

Read more: The CEO of EV-charging company ChargePoint reveals how it plans to spend $127 million in fresh funding

"You're looking at about a 20-fold increase in the number of EV charging stations, which would really help the electric vehicles in the adoption," Nelson said.

Tax credits — both those that reduce consumer sticker price , and those sold to other automakers that help Tesla's bottom line — are another large focus of Biden's policy proposals. The candidate also wants to switch the US government's 3 million auto purchases a year to electric ones that are manufactured domestically, while increasing consumer rebates on trade-ins of older gas-guzzlers in a plan not unlike "cash for clunkers."

Those plans have already won over major labor unions, including United Auto Workers, who said in April that "Biden's experience in the Obama-Biden Administration during the successful auto recovery will be instrumental as the industry experiences massive changes in technology and jobs in auto and other UAW sectors." That could prove extra beneficial in Biden's push to court workers in the all-important Midwest states those factories are located, Nelson said. 

Tesla this month revealed its fifth consecutive quarter of profits and announced continued investment into its new factories, including its Gigafactory in Texas, where it will eventually produce its Cybertruck. Nelson says that's another product that will eventually help Tesla's bottom line.

"The pickup truck segment is so strong in the United States that we think it will have some appeal beyond the niche product," he said. "The sales, I think, will surprise to the upside."

Shares of Tesla are up more than 385% this year, but have stuttered in recent months as investors await word on ability to hit lofty vehicle-delivery targets by the end of the year.

Read the original article on Business Insider