Tesla (TSLA, Financial data) could reach a valuation of $2 trillion in the next 12 to 18 months, according to a report from Wedbush analyst Dan Ives.
The main growth drivers are expected to be the automaker’s developments in artificial intelligence, autonomous driving and the upcoming Cybercab.
Ives cites Tesla’s commitment to fully autonomous driving technologies and CEO Elon Musk’s impact in creating federal regulations as important elements. Possible cooperation with the Trump administration could accelerate driverless car projects, thereby relaxing rules and meeting Elon Musk’s aspirations in the field of artificial intelligence.
Ives said the Department of Transportation should prioritize formalizing a framework for self-driving cars. He also mentioned how creating an AI czar position would motivate broader AI initiatives; his estimate of the value of Tesla’s AI and autonomous technology alone is $1 trillion.
We hope that, under the Trump White House, these initiatives will now be accelerated as the federal regulatory cobweb that Musk & Co has faced over the past few years significantly clears, Ives said.
The regulatory hurdles slowing Tesla’s progress could be eased under a possible Trump presidency, providing a cleaner path for growth. Ives believes this climate could accelerate Tesla’s ambitions for 2026-2027, allowing the company to compete with Chinese developments in AI and self-driving cars.
The possible loss of the $7,500 federal electric vehicle tax credit further adds to Tesla’s competitive advantage in the electric car industry. Ives said Tesla’s size and market dominance would confirm its place in a market without subsidies.
With a $400 price target, Wedbush has an outperform rating on Tesla, highlighting investors’ focus on the company’s long-term development plan and the fate of AI.
This article first appeared on GuruFocus.