TESLA : Renewed Optimism

(Tue, 22 Sept 2020). Tesla is thriving once again, as the company’s share price nears all-time highs. Renewed optimism comes in anticipation of Battery Day.

Before Monday’s open, TSLA stock had recovered 33.9% in the last ten days as the anticipation towards Battery Day intensifies. Lucid Motors chief Peter Rawlinson says Tesla is creating core technologies from scratch, which not even Porsche does. The carmaker is now in an advantageous position against both electric carmakers and traditional car companies. Tesla is thriving once again as the share price nears all-time highs. Optimism around the carmaker comes in anticipation of the highly touted Battery Day.

By Friday, Tesla’s stock price had recovered 33.9% over the previous ten days. Analysts hint that Tesla’s bearish case is invalidated, and even fellow electric carmakers are now praising Tesla.

Tesla Is Outdoing Traditional Carmakers

Investors have snatched up Tesla stock following the recent decline, signaling the market’s confidence in the EV maker. Several factors are buoying momentum. These catalysts include troubles at Nikola, Tesla’s superior battery technology, the resilience of TSLA stock, and the company’s production capacity.

The most significant catalyst appears to be Tesla’s battery technology and manufacturing capacity. According to Tesla’s former chief engineer Peter Rawlinson, the company is developing its core technology by itself.

Rawlinson, who serves as the CEO of the U.S. electric carmaker Lucid Motors, said not even Porsche does that. Tesla also has massive production capacity. Speaking to the Financial Times, Baird’s technology analyst Ben Kalio raised a similar point. Kalio emphasized that Tesla has an advantage in being able to start and create technologies from scratch.

Tesla’s vehicles are not modified from existing internal combustion engine-based models to battery-based vehicles. They are designed and produced to run efficiently as electric cars. Tesla’s battery technology gives the company a strong head start over other electric car companies. In building its vehicles from scratch, Tesla it in an advantageous position over conventional carmakers. The analyst also emphasized that concerns about Tesla “going to zero in the medium term” is no longer an issue.

The Pandemic is Indirectly Helping TSLA Stock

The pandemic is also boosting the outlook of TSLA stock in various ways. First, the pandemic has amplified the struggles of major carmakers. In the near term, that might further intensify the optimism around TSLA stock.

Second, fears of infection might impact the usage of public transportation. If the virus persists throughout 2021, it might cause demand for cars to increase.

Across major markets, the demand for electric cars has already started to soar. As a result, McKinsey expects electric car sales in China to reach up to 3.5 million in 2022.

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