New Street Research analyst Pierre Ferragu anticipates the company will sell 2 million to 3 million cars per year after 2025 at industry-leading margins, justifying a market capitalisation of US$230 billion to US$350 billion, or about US$1,100 to US$1,700 per share.

“The stock will remain volatile, as the spread between bull and bear cases remains wide,” said Ferragu, who boosted his price target to a Street high.

“And God only knows what the next controversy will be.”

Tesla is set to report quarterly earnings next week. Shares of the company rose as much as 6.9% to touch US$545.90 in New York on Tuesday, and have increased more than 100% over the past three months.

A surprise third-quarter profit and strong deliveries for the fourth quarter helped fuel the rally, along with the opening of its China plant.

Ferragu, who raised his price target to a US$800 from previous US$530, expects the company to beat estimates for free cash flow when it releases fourth-quarter earnings on Jan 29.

He also predicts 2020 delivery guidance will exceed projections, and sees a potential drop in gross margins in the first half of the year as Shanghai-assembled Model 3s – which have higher fixed costs per car – increase in the overall mix.

Earlier on Tuesday, Bernstein analyst Toni Sacconaghi struck a cautious note, saying the Shanghai Gigafactory production could pressure margins in fourth and first quarter.