After taking a break from its big year-to-date rally, Tesla (NASDAQ:TSLA) shares have resumed their upward trajectory and there is an upcoming catalyst that could sustain the uptick. On Wednesday (March 1), the EV leader will hold an investor day at the Gig factory Texas.
There could be plenty of fireworks on offer that could “help the stock keep rerating higher,” says Deutsche Bank analyst Emmanuel Rosner. “We expect the company to introduce Master Plan 3 and present the main drivers of its longer-term growth strategy, and in particular its 3rd generation vehicle platform which could support multiple future vehicles and segments at a lower price point,” the analyst further said.
Tesla stock ended the year on a five-month losing skid, giving back about 67.5% from the August high to the early January low and bottoming just above $100. From the all-time high, the electric-vehicle leader’s shares fell about 75%.
The selling pressure was intense coming into the year, fueled by concern for Tesla’s vehicles and following Elon Musk’s takeover of and involvement in Twitter.
Those fears have abated at least for now as the bulls continue to pile into this name.
On Wednesday, Levy expects Tesla will offer an update on its next-generation vehicle, potentially a less expensive car that could help the company grow for years to come. Tesla vehicles cost roughly $55,000 on average, putting them firmly in luxury-car territory. A car priced at $30,000 or below would open up far more of the global car market to the company.
Still, the stock’s recent run has made Levy nervous. Coming into Monday’s trading session the stock was up about 60% so far this year. It was up about 93% from the Jan. 6 52-week low of $101.81 a share.
John Roque, senior managing director and head of technical strategy at 22V Research, feels similarly. “I’d rather be a seller on any strength,” says Roque. “I’d rather be a seller here, too.”
Musk’s Twitter act has negatively affected Tesla
It’s no secret that Tesla (NASDAQ:TSLA) CEO Elon Musk’s controversial acquisition of Twitter has caused adverse consequences for both Tesla and Twitter, with many employees leaving the latter and risking its survival. This has also affected Tesla’s brand and stock price, leading to investors and customers distancing themselves from the company. Musk’s image and leadership have been crucial to Tesla’s success and its stock price, so it’s no suprise that with him getting increasingly distracted running Twitter, things aren’t going as swimmingly for Tesla.
Tesla’s stock has fallen by more than half since the announcement of the acquisition of Twitter. To be fair, Tesla is also facing stiffer competition in the electric vehicle market, but part of the reason for this is its product line has also grown stale, and it’s been resorting to price cuts that have damaged its once-elite image. Although Tesla’s stock has begun to rebound, concerns about Cybertruck’s production delays and safety issues could negatively impact the company’s market share.
Li delivered just over 15,000 of its electric cars in January, but it projected first-quarter deliveries totaling between 52,000 and 55,000. That implies an average of about 19,000 per month for February and March. That volume approaches Li’s monthly record, which it set in December 2021. Sales from most EV makers in China struggled last year from production and consumer impacts related to COVID-19 lockdowns. It’s great news for Tesla’s Chinese sales if that damage is finally in the rearview mirror.
Tesla’s plant in Shanghai, China, is its highest-volume facility. It has also used that factory to supply European customers. The news that Tesla’s German factory is several weeks ahead of schedule with its production ramp-up means the company is more likely to hit its 50% annual growth target for deliveries.
Tesla investors are buying the stock today based on that news as well as the potential updates the company will provide on Wednesday.
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