Piper says Tesla arguably benefits from China’s ‘fake’ EV sales

Piper Sandler analyst Alexander Potter notes that media reports have questioned the legitimacy of China’s EV sales figures “for years” and that the firm has received investor questions on this topic recently. The firm acknowledges that in past research it has noted that “some skepticism is likely warranted,” but adds that even unwanted EVs contain lithium, graphite, and nickel and notes that the Chinese companies that mine and refine these metals have “achieved unrivaled scale” such that China’s battery supply chain “has become a juggernaut.” In that context, the firm argues that companies like Tesla arguably benefit from China’s “fake” EV demand, because it supports upstream scale and reduces input costs. Piper maintains an Overweight rating and $280 price target on Tesla shares.