The Future of Tesla (TSLA)
We’re sure you have heard about the electric vehicle giant. Not only is Tesla the largest EV company (valued at ~ 850B), but it also has great success in the overall car market. Tesla is a unique car company as cars are not the only point of focus. This article will explore Tesla and provide some points of interest for investment.
Let’s first dive into what Tesla is. Tesla can be described as a company that manufactures automobiles that rely solely on renewable energy, in order to mitigate the effects of climate change. The current Tesla lineup includes models S, 3, X, and Y. The lineup will soon include the Cybertruck, which is set to release to the public in the fall of 2023. But more on the Cybertruck later. The main Tesla lineup has proven itself, with the Model Y being the number 1 seller of all cars in quarter 1 with 267,171 sold.
In a report that was released on July 2nd, Tesla beat analyst expectations for deliveries in Q2. Tesla delivered 466,140 cars, exceeding expectations of 448,000. The full report can be found here.
Back to the Cybertruck. What’s all of the hype about? The Cybertruck became a viral sensation following its unfortunate performance in the unveiling at a Tesla event in 2019. If you missed that announcement, you can check it out here. Since the announcement, small amounts of production have begun, but mass production is expected by the end of the year. The Cybertruck has piqued the interest of many because it’s unique look, and extremely practical features, including its towing capacity, suspension, interior, and more. The addition of the Cybertruck could add value to the company, like the other vehicle on its way to the lineup.
Another highly anticipated vehicle coming to the Tesla lineup is the semi-truck. The Semi was announced in December 2022, with a 500 mile range, 20s 0–60, and < 2kWh per mi energy consumption being the highlighted features. The main point of interest to investors should be the potential for automated driving. Revolutionizing the trucking industry could mean more efficient driving and a redirect of company resources away from shipping. The Semi is expected to hit main markets in the next year, however, some models have already been delivered to Pepsi (PEP) for testing.
So what does this all mean for investors? An expansion of vehicle classes available could result in a more significant part of the auto market captured. This could lead to company growth, and as a result, a positive movement for the stock. However, there are plenty of questions that remain in the air: Can Tesla meet demand with its current lineup while expanding to new markets? Will the new vehicles succeed in their respective fields? What about federal regulations? These questions will be answered in the near future; meanwhile, it’s hard to ignore Tesla’s growth this year.
Tesla (TSLA) is up 153.87% year-to-date. This is due to a number of reasons. The news regarding the Cybertruck and Semi certainly contributed, but other announcements helped boost Tesla shares. Partnerships between other major automakers gave Tesla an edge in EV charging. Ford, GM, Mercedes-Benz, and Rivian have all adopted Tesla’s EV charging standard, meaning all compatible vehicles can use Tesla superchargers. This is huge for Tesla, especially as more companies adopt the standard. Tesla will control the chargers for these companies, meaning they can profit from the sale of the electricity supplied. This profit will grow as more companies adopt the standard.
Additional revenue streams are ideal for company growth, as they offer more opportunities for the company to expand to alternate markets. News of the EV charging standard adoption has been developing in the past few weeks, and it is possible more brands will adopt the standard in the future.
All information in this article is for educational purposes only and is not to be considered financial advice. Do your own research and consult a financial advisor for advice.
Financial data provided by Google Finance.
