Tesla's growth hinges on car deliveries and gross margins. Analyst hikes target price from $315 to $500. Add Comment TSLA could deliver a “choppy” first half given headwinds from Donald Trump‘s new electric vehicle policies, uncertainties in deliveries, and automotive gross margin. However, this Piper Sandler analyst describes the EV maker as its number one “buy-and-hold idea”. The Piper Sandler Analyst: Alexander Potter maintained his ‘overweight' rating and raised its target price to $500 from $315 apiece, representing a 20.45% increase from its current price level of $415.11, as of Wednesday’s close. The Analyst Takeaways: According to the Piper Sandler note, Tesla’s success in the near future depends on two key things: How many cars they sell: Tesla plans to release new vehicles soon, but the exact timing is uncertain. This makes it hard to predict how many cars they will sell in 2025, says the note. While there’s a chance they might sell fewer cars than expected, it’s unlikely to see clear evidence of this until the upcoming earnings call on Jan. 29. How much profit they make on each car: Piper Sandler is more optimistic about Tesla’s profit margins. As long as they continue to release new products as planned, they expect their profitability to remain strong. Also, the note adds that Tesla’s future success hinges on emerging technologies like Optimus robots and AI-powered services. Since valuing these uncertain revenue streams is challenging, Piper Sandler has adopted a price-to-earnings approach over a discounted cash flow approach, which measures a stock’s intrinsic value in a constant growth environment. Piper Sandler’s $500 price target assumes a P/E of 120 for 2026 earnings. The note added that over the next year, the analyst expects investors to gain a clearer understanding of Tesla’s new product rollout. Why It Matters: Apart from the factors mentioned in the research note, President Trump’s revocation of Joe Biden‘s EV targets, freezing the EV infrastructure funding, and proposals of repealing tax credits, could raise concerns.