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Tuesday Ticker: March 23, 2021

Toronto, Ontario ⁠— In this week’s Tuesday Tickers, U.S. officials set their eyes on Canada for EV material production, Porsche further considers the idea of an initial public offering and market analysts make wild predictions on Tesla’s future share prices.

Scouting success

On Thursday, the U.S. Department of Commerce is hosting a closed-door virtual meeting with miners and battery manufacturers to discuss ways to boost Canadian production of EV materials, according to documents seen by Reuters.

The move comes as demand for electrified transportation is set to surge over the next decade.

Conservationists have strongly opposed several large U.S. mining projects, leading officials to look north of the border to Canada and its supply of 13 of the 35 minerals deemed critical for national defence by Washington.

Tesla Inc., Albemarle Corp., Talon Metals Corp. and Livent Corp. are among the more than 30 attendees to attend the upcoming meeting, where the companies will discuss ways Washington can assist U.S. companies to expand in Canada and overcome logistical challenges, according to the documents.

The event comes after President Joe Biden and Canadian Prime Minister Justin Trudeau committed last month to constructing an EV supply chain between the two countries.

Since Biden’s election, three U.S. mining companies have invested in Canada, where mining accounts for five percent of the country’s gross domestic product, versus roughly 0.9 percent in the United States.

Canada’s Fortune Minerals, which is developing a cobalt mine in the Northwest Territories, has also held funding talks with the U.S. Export/Import Bank, its chief executive told Reuters.

“The United States is really taking this seriously,” said CEO Robin Goad.

Push from Porsche?

Porsche CEO Oliver Blume signalled that he would be open to considering an initial public offering of the German sports-car maker if Volkswagen Group decides to pursue one.

“I think Porsche could be an interesting part for thinking about an IPO,” Blume said during a briefing with U.S. reporters, cautioning that a final decision will not be his to make. “We have to hand it to Volkswagen and they have nothing decided.”

Listing Porsche has long been teased as a way to strengthen VW’s stock market valuation and help it catch up to other automakers. Faced with tens of billions of costs for a radical shift towards electric mobility and software, VW is reportedly speaking with advisers to study the merits of a potential listing of Porsche.

However, VW Group CEO Herbert Diess seemed to pour cold water on the idea when he said the automaker has no “immediate need” to raise funds for its costly push into electric cars, batteries and software. The German group, which owns 12 automotive brands, generates ample cash to pay for the transition, he said.

Tesla to the top

One analyst is predicting incoming sunny skies for Tesla, despite its losses in recent months.

Ark Investment Management, run by Cathie Wood, expects Tesla shares to reach at least US$3,000 by 2025⁠—a rise of more than 350 percent from last Friday’s close. 

Worst-case, Ark predicts Tesla shares to have an absolute bottom of $1,500 for 2025, according to a Friday note from the company. 

“Last year, ARK estimated that in 2024 Tesla’s share price would hit US$7,000 per share or US$1,400 adjusted for its five for one stock split. Based on our updated research, we now estimate that it could approach US$3,000 in 2025,” wrote the company.

Ark has drastically altered its price target due to the firm’s increased assumptions for Tesla’s ability to achieve its growth plans. The firm is also factoring in gains it expects the EV automaker to reap from its insurance business in some U.S. states, and cited a “robotaxi” venture teased by CEO Elon Musk as another attributing factor.

Ark also expects Tesla to reach full autonomous driving capabilities by 2025.

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