We expect more consolidation in traditional auto space, allowing Tesla to grow stronger: Analyst

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Tasha Keeney, analyst at ARK Invest, a longtime Tesla bull, talks Tesla amid the 10-year anniversary of the tech company's IPO.

Tesla is peeling away from the pack.

The automaker’s head starts in developing electric and autonomous vehicles are solidifying its lead over the rest of the industry as the Covid-19 pandemic weighs on car sales and disrupts supply chains, Ark Invest analyst Tasha Keeney told CNBC’s “Trading Nation” on Thursday.

Shares of Tesla closed up nearly 3% on Thursday even though the company placed last in JD Power’s Initial Quality Survey, which tracks the problems new car owners have within their first 90 days of purchase. Tesla’s first-ever profile in the widely followed report measured 250 problems per 100 of its vehicles, far above the average of 166.

Ark Invest’s long-term price targets for Tesla are $7,000 per share at the base case, $1,500 in a bear-case scenario and $15,000 for its bull case. Tesla shares were trading at $995 in Friday’s premarket.

Keeney, an autonomous technology and robotics analyst, noted that Tesla gets consistently high rankings in consumer satisfaction surveys.

“They were once a start-up. They’re now a major auto manufacturer. I wouldn’t doubt that there are some imperfections in the car, but what I think we see happening is that consumers still love them.”

She added that premium cars often score lower than average on the JD Power survey, “so this could just be customers having really high expectations of a Tesla and sort of pointing out all of those little mishaps that they see.”

“Overall, this seems sort of like a short-term event in sort of Tesla’s long-term trajectory in being a leader in electric vehicles and autonomous transportation,” said Keeney.

She added that that dynamic is crystallizing for Tesla as legacy automakers are forced to shelve ongoing electric and autonomous car projects so they can focus on stemming Covid-related losses. For instance, the first three months of the pandemic cost General Motors $1.4 billion before taxes.

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