Goldman Sachs says Tesla will sell 15 million cars per year by 2040 - nearly double General Motors

• Goldman Sachs is now Tesla's biggest bull on Wall Street.
• The company could sell 15 million cars annually by 2040, the bank said Wednesday.
• Last year, Tesla sold about 368,000 cars worldwide.

Tesla's already worth more than any other American automaker, and Goldman Sachs expects it to soon overtake their sales numbers too.

The bank on Wednesday upped its financial estimates and price target for the automaker's high-flying stock to $780, the highest on Wall Street, citing continued market share gains.

"If Tesla sustains its mid to high 20% range share of the EV market, then it could reach 15 million units by 2040 (and about 20 million under our upside-case EV market adoption scenario)," the bank's autos research team, led by Mark Delaney, said in a note to clients.

For comparison, Tesla sold about 368,000 vehicles in 2019, while competitors like Ford and General Motors sold roughly 5.4 million and 7.7 million worldwide, respectively.

"Importantly, we expect that Tesla's integrated model (including its coupling of custom hardware and software, platform approach with significant parts overlap between key products like the Model 3 and Y, and its ability to offer a full ecosystem of products for consumers including solar, storage, and convenient access to fast charging) will help it to sustain a leadership position in the EV market," Goldman continued.

Battery cost savings coupled with recurring "full self-driving" revenue if the company makes good on Elon Musk's plan to switch the software to a subscription service and a mix-shift to higher-priced vehicles are also good news for Tesla's margins, Goldman Sachs says. Margins have been on Musk's mind this week, after he emailed workers a dire warning on saving money anywhere possible.

Read more: Elon Musk warns Tesla staff that its stock could 'get crushed like a soufflé under a sledgehammer' if the company isn't careful about spending

Shares of Tesla jumped five percent in trading Thursday following the bank's upgrade and bullish tone.

Solar is another virtually untapped market that could total $500 billion by Goldman's estimates. That technology is becoming cheaper just like car batteries.

"Given the potential annual savings on electricity, the incremental cost for a solar roof compared to a traditional roof has the potential to pay for itself over the life of the roof," the analysts wrote.

Tesla reported "record deployments" for its home energy generation and storage products in October, and the segment was a big focus of "battery day" in September.

"The biggest constraint right now in Solar Roof ramp is getting enough installers on board and trained and experienced," Carl Peterson, an engineering manager for energy hardware, told investors at the time.

But there are risks, of course, and Goldman specifically warns about software. Tesla has launched a beta version of its "full self-driving' product - which is not self-driving - and plans to roll out a full version to all owners who have purchased it soon.

"If Tesla is unable to drive significant long-term growth from software, then we could be more negative on the stock," Goldman said. "This could occur if Tesla is unsuccessful in achieving L3-L5 autonomous driving capability with its full self driving (FSD) software that has been delayed in the past, or if regulators don't allow Tesla to sell its FSD software (which could occur if Lidar sensors, which Tesla doesn't use on its vehicles, end up being a regulatory requirement)."