Tesla (TSLA) is moving towards the "biggest" innovation and technology cycle in its history over the next few years as it is expected to launch a low-cost $35,000 model before summer that will increase EV consumer demand around the globe, Wedbush said Thursday in a note.

Wedbush added the electric automaker to its Best Ideas list and addressed investors' worries about negative sentiment concerning Tesla Chief Executive Elon Musk's role as the head of the Department of Government Efficiency and the implications on Tesla sales.

The EV manufacturer will kick off its autonomous era this summer by introducing its unsupervised full self-driving vehicle in Texas that Wedbush values "at $1 trillion alone on a sum-of-the-parts valuation," analysts led by Daniel Ives said.

Analysts said they believe autonomous driving will represent "the biggest transformation to the auto industry in modern day history," and that Tesla will hold a dominant position in the autonomous market both in the US and globally.

Tesla does have some concerns including falling sales in Europe and China, and Musk protests/brand worries but it is poised towards a more than $2 trillion market valuation due to autonomous and Optimus, the analysts said.

The analysts also said they continue to believe that a second presidency of Donald Trump represents "the best thing that ever happened" for Musk and Tesla as it enables a "deregulatory environment with a federal autonomous roadmap" that is key to Tesla's vision.

Wedbush maintained an outperform rating and a $550 price target.

Shares of the company were down 1.5% in recent Friday premarket activity.