Tesla stock rallied on Wednesday despite a disappointing start to the Model 3 manufacturing. It turns out that there’s a new bull in town, and he’s got a new ultra-bullish price target as he sees a path for Tesla stock to hit $500. Now short-sellers who benefited from the stock’s pullback last month are back in the fire yet again.

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Nomura Instinet analyst Romit Shah initiated coverage of Tesla stock on Wednesday with a Buy rating and $500 price target. He compared the automaker to 1990s-era Intel when the chip maker dominated the PC market. He feels that Tesla is well-positioned to capture “most of the profits in the electric vehicle value chain,” he wrote. His $500 price target represents more than 40% upside from the closing price of Tesla stock on Tuesday. Of the 19 firms that cover Tesla stock and submit numbers to FactSet, Nomura now has the highest price target.

Shah praised the EV maker’s vertically-integrated business model and said that Intel operated in a similar fashion when it scaled up its sales from $4 billion to $34 billion during the 1990s. He noted that processor performance limited PC power, but for EVs, costs and battery range are the limiting factors. Thus, he says that everything hangs on advances in battery tech.

Further, he explained that Tesla enjoys economies of scale from its Gigafactory which enable it to pack more power in its batteries. The result is $140 per mile of range for the Model 3, compared to the $236 per mile of range for competitors, he estimates. As a result, he sees Tesla as having “an insurmountable lead in vehicle range per dollar.”

He projects that Tesla’s revenues will skyrocket to $58 billion in 2021 from only $8 billion in 2016. He pegs Tesla’s vehicle deliveries at 877,000 by then and expects the automaker to deliver only 112,000 vehicles this year. Although most other analysts are worried about production, he added, he feels that this will only be a temporary problem.

One would have thought that Tesla stock would stumble on the news that the company missed delivery expectations yet again, but analysts such as Shah have given it a boost. Tesla said it produced only 260 Model 3 cars during the third quarter, although it had expected to manufacture 1,600. The automaker delivered 220 Model 3s, also coming up far short of the 1,500 it said it would deliver in its last shareholder letter in August. Overall, Tesla delivered 26,150 vehicles during the third quarter/

Goldman Sachs analyst David Tamberrino said in a note on Tesla stock on Tuesday that this latest delivery disappointment is yet another reason to be concerned about the company’s ability to deliver on CEO Elon Musk’s ambitious goals. He has a Sell rating on Tesla stock, but he still raised his price target from $200 to $210 per share because the automaker managed to deliver more of its other cars than expected. Tesla also said this week that it expects to exceed its previous outlook for Model S and Model X deliveries in the second half of the year “by several thousand vehicles.”

On the other hand, Tesla stock perma-bull Adam Jonas of Morgan Stanley maintained his bullish stance, noting that “most auto launches have hiccups.” He feels that Model 3 quality is more important than the number of deliveries at this point, adding that so far, the first vehicles haven’t had many of the “problems that often plague early-production cars.” The problem with this argument, however, is that the first Model 3s were delivered to Tesla employees and insiders, which means that any serious issues might not reach the ears of the public yet.

Tesla stock rose by nearly 2% on Wednesday, climbing as high as $358.62 and inflicting pain on short-sellers such as Jim Chanos. He told Bloomberg Television last week that the Model 3 is “actually sort of a beta test right now.” Chanos has been shorting Tesla stock for quite some time now.

In September, Tesla stock was the most profitable auto sector short, according to data from financial analytics firm S3 Partners. Research head Ihor Dusaniwsky said in a note last week that short risk in the Auto Manufacturer Sector is spread around the globe with $33.6 billion at risk and only $13.1 billion of that in the U.S.

He added that the top 20 shorts in the sector account for 92% of the sector’s short interest, which is up $12.1 billion year to date. According to S3 data, short interest in Tesla stock made up $2.3 billion or one-fifth of that increase. However, he added that short interest in the automaker has fallen $1.8 billion from its recent high of $11.4 billion in the middle of last month. Short-sellers began to cover some of their positions when Tesla stock tumbled $40 off its record high. Interestingly, short interest in BYD, the Chinese electric bus maker backed by Warren Buffet, increased $547 million to $1.2 billion in September.

Dusaniwsky added that shorts in the auto manufacturing sector have not been doing well, as the top 20 shorts were down $6.5 billion in mark-to-market losses year to date, and $4.1 billion or about two-thirds of those losses were suffered by those shorting Tesla stock. September was the exception as Tesla short-sellers were up $160 million in September to make the stock the most profitable short in the sector for the month.

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