06:17 PM EDT, 06/22/2024 (MT Newswires) -- Tesla's (TSLA) autonomous and full self-driving strategies will be crucial in helping the electric vehicle maker reach a market capitalization of more than $1 trillion, according to Wedbush Securities.

At Friday's close, Tesla's market cap stood at around $583.75 billion. The company's shares are down nearly 27% so far this year amid waning EV demand. Earlier this month, Tesla shareholders approved Chief Executive Elon Musk's $56 billion compensation package and a proposal to move the company's state of incorporation to Texas from Delaware. Shareholders first approved Musk's payout plan in 2018, but a Delaware judge in January voided the package, calling it an "unfathomable sum." The company is appealing that decision.

"We would expect once Tesla officially gets through the final steps in this Twilight Zone Delaware legal spider web that the board will have a new incentive-driven AI [compensation] package for Musk that gets him to [a 25%-plus] ownership while keeping all AI initiatives under the hood of Tesla," Wedbush analyst Daniel Ives said in a note Friday.

In April, Musk said Tesla will unveil robotaxi Aug. 8, but didn't provide additional details. In April 2022, he said the company was working on a dedicated robotaxi with no steering wheel or pedals.

"Musk was very optimistic at the recent shareholder meeting around autonomous, new models coming, and it appears validation around Musk's strategic vision with FSD and Optimus is starting to take hold with some early positive signs," Ives wrote. Wedbush said it sees the Aug. 8 robotaxi event as a near-term catalyst for the company.

"Ultimately, the key to reaching a [$1 trillion-plus] valuation is the autonomous and FSD vision taking hold for Tesla, which appears to be turning a corner with this latest FSD v12.4 and now China FSD testing underway," Ives said, adding that Tesla is "more of an AI and robotics play" than a traditional car company.

The brokerage said it has seen "some signs of stabilization" in pricing for the company over the last few months, with the bulk of the price cuts now likely in the rear-view mirror. Demand in China is likely heating up, with consumers recognizing there would be no major price reductions ahead. "EV competition from BYD, Nio, and others remain very fierce in China," Ives said. "Ultimately, for Tesla to see a global demand rebound, this does not happen without China."

Wedbush said it sees positive catalysts ahead for Tesla with its upcoming robotaxi day in August, with a rebound expected in the second half of this year following "a very choppy" demand performance in the first half.

The brokerage maintained its outperform rating and a $275 base case price target on the Tesla stock, with $350 as its bull case upside target, which it said is built around the company finding success on FSD and the autonomous future, according to the note.

Price: 182.85, Change: -0.16, Percent Change: -0.09