Tesla Inc. (NASDAQ: TSLA) has had a pretty good year so far. The stock is up nearly 300% in 2020, the company is approaching deliveries of 400,000 vehicles per year, and a five-for-one stock split will make the shares available to more investors. Two long-time Tesla bears are so impressed that they’ve raised their ratings and price targets on the automaker’s stock.

On Thursday, Morgan Stanley’s Adam Jonas raised his rating on Tesla from Underweight to Equal Weight and lifted his price target on the stock from $1,050 to $1,350. With the shares trading at more than $1,600, this was still a pretty cautious move.

Friday morning, Bank of America’s John Murphy also raised his rating on the shares from Sell to Hold and lifted his price target from $800 to $1,750. It may have taken him a while to be convinced, but Murphy can’t be faulted for remaining too cautious.

Interestingly, each analyst had a different explanation for his upgrade. Morgan Stanley’s Jonas is most impressed by Tesla’s positioning as a “vertically integrated battery supply business.” If the company is successful in the battery business, it could add $310 to the share price (roughly $63 per share following the stock split that becomes effective at the end of this month).

BofA’s Murphy is most impressed by Tesla’s “unfettered access to low-cost capital.” He goes on to say that Tesla could accelerate its growth by almost 50% per year over the next five years. That estimate is in line with a statement Tesla CEO Elon Musk made earlier this summer, predicting growth of 40% to 50% annually through 2030. If that actually happens, Tesla will be building 15 million vehicles a year by the end of the decade.

Murphy also acknowledges how the rising share price figures into future success for Tesla: “[T]he higher the upward spiral of TSLA’s stock goes, the cheaper capital becomes to fund growth, which is then rewarded by investors with a higher stock price.” If ever there was a virtuous circle for investors, this is one.

For his part, Jonas is most impressed by Tesla’s ability swiftly to improve “the entire electric vehicle stack.” He goes on to say that this ability could disrupt the battery industry “with the potential to grow the market on its own.” The company is hosting a Battery Day on September 22 at which Morgan Stanley anticipates it will reveal its latest battery technology, which the analysts expect to be “superior” to anything else on the market.

That could be tricky given that Lucid Motors earlier this week announced a battery for its Lucid Air luxury sedan that has a driving range of 517 miles, well above the 400-mile range available from Tesla’s top-end battery. But range is just one metric in the battle of the batteries. There are charging time, temperature range and weight, among many others.

Access to cheap capital and superior battery technology make a powerful argument for a higher price target on Tesla stock. But, as Murphy pointed out, the virtuous cycle can become a vicious one wherein a failure to execute sours investors on the stock, capital becomes more expensive and investors begin to head for the exits. In other words, Tesla stock could still be volatile based on short-term news.

Tesla stock traded up about 2.2% Friday morning, at $1,656.06 in a 52-week range of $211.00 to $1,794.99. The consensus price target on the stock is $1,256.25, and shares trade at a multiple of 106 times expected 2021 earnings. Now that’s rich.

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