Canaccord Genuity analyst Jed Dorsheimer became one of Tesla's (NASDAQ:TSLA) most optimistic bulls on the Street on Thursday. The analyst boosted his 12-month price target on the stock from $375 to $515.

Here's a look at why Dorsheimer is so bullish on the stock -- and how better-than-expected deliveries on Friday and an update from the company on its production capacity at its new factory in China helped move the stock a step closer to this target.

Tesla's Model S, 3, X, and Y

Tesla's Model S, 3, X, and Y. Image source: Tesla.

2020: A great year for electric vehicles?

"We believe the trend toward electrification will only accelerate in 2020," said Dorsheimer in a note to investors on Thursday, a day before Tesla released its fourth-quarter delivery numbers. "While bears have feared demand issues as a function of tax credit expiration for Tesla, we suspect a solid Q4 combined with the robust Q3 should put these fears to rest and put to rest this issue as the credit expires."

Of course, if electrification does accelerate in 2020. Tesla is positioned to benefit. Not only has it proved it can build 300,000 units of its most affordable and newest vehicle per year, but it now also has an operational factory in China to better cater to the world's largest auto market.

While Dorsheimer's $515 price target only represents 16% upside from where shares ended the trading day on Friday, it would add to an already incredible run for the stock. Shares are up more than 80% in the past three months alone.

Strong momentum in Q4 and a promising start in China

Optimism for Tesla stock only increased on Friday, when the electric-car maker said it delivered a record 112,000 vehicles during the period, bringing total 2019 deliveries to about 367,500 -- up 50% year over year. On average, analysts were expecting Tesla to deliver about 106,000 units during the quarter.

Tesla also had some good news on its new Gigafactory in Shanghai, which just started delivering vehicles.

Despite breaking ground at Gigafactory Shanghai less than 12 months ago, we have already produced just under 1,000 customer salable cars and have begun deliveries. We have also demonstrated production run-rate capability of greater than 3,000 units per week, excluding local battery pack production which began in late December.

With 2020 under way, questions remain. Namely, investors are probably wondering whether Tesla's gross margin will be negatively affected, with a much higher percentage of deliveries representing the company's lower-cost Model 3 than in the year-ago period.

But with deliveries of China-made Model 3 vehicles about to ramp up in the important market and with the Model Y slated to come to market sometime this summer, there's a lot to look forward to. Of course, Tesla will have to serve investors nearly flawless execution throughout the year to live up to its pricier valuation.