Investor's Corner
Tesla is now more valuable than Volkswagen and BMW combined
Tesla stock closed at a record-high of $780 per share on Monday, pushing the California-based electric carmaker’s valuation to $140.591 billion and above the market cap of Volkswagen and BMW combined. Tesla’s latest record-setting valuation further solidifies the Elon Musk-led company’s position among legacy automakers, eclipsing Volkswagen’s market cap of $90.672 billion and BMW’s $45.894 billion.
Earlier this month, Tesla overtook Volkswagen as the second most valuable carmaker in the world. The latest valuation widens the gap between the two manufacturers to roughly $50 billion on Monday.
Wall Street’s prediction on the further upside of TSLA gave the price some boost. Argus Research upped its price target for the electric carmaker to $808 from $556 citing revenue growth from Model S and Model X and the strong demand for the Model 3.
“Despite past production delays, parts shortages, labor cost overruns and other difficulties, we expect Tesla to benefit from its dominant position in the electric vehicle industry and to improve performance in 2020 and beyond,” said Argus Research analyst Bill Selesky.
ARK Investment Management also updated its valuation model and believes the stock could hit $7,000 per share or even a best-case scenario of $15,000 by 2024.
For Gene Munster, managing partner of Loup Ventures and a known Tesla Bull, he attributes the bright future of Tesla to its head start against automotive giants with deeper pockets.
“The thesis for Tesla’s business miracle is rooted in the handful of years that the company operated with effectively no competition. Tesla has nearly a decade head start in EVs as other automakers under-invested in the space,” Munster said.
Tesla has a commanding presence in the mid-luxury sedan market that’s wreaked havoc on BMW and Mercedes Benz who have both been slow in delivering a viable electric vehicle for the everyday consumer. With Tesla’s investment into fun yet useful over-the-air features that have been otherwise foreign to traditional automakers, the company will continue to see unparalleled growth in the industry.
Tesla chief Elon Musk will host an AI hackathon party at his house to accelerate the development of Tesla’s full self-driving capability and Autopilot feature, and most likely fish for new talents to join the company.
Tesla will start the delivery of the Model Y this March, way ahead of schedule. The much-awaited crossover also has an updated EPA range of 315 miles from the original rating of 280 miles.
The Silicon Valley-based carmaker is also getting closer to laying the first bricks of its first factory in Europe, Giga Berlin. It also recently applied for subsidies for its battery cell production in Grunheide, which will help keep costs optimal. In China, Tesla’s factory is offline at the moment due to the ongoing novel coronavirus pandemic but Tesla China is continuing its push and answers questions from potential customers via social media.
If Tesla keeps on track and execute flawlessly, we can only expect to see analysts and the automotive world get more bullish and the long-term expectations of skyrocketing stock prices will highly likely come true.
As for the short sellers, losses amounted to $2.5 billion on Monday or about $8 billion since the start of 2020, according to data power company S3 Partners.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla stock closes at all-time high on heels of Robotaxi progress
Tesla needs to come through on this one Robotaxi metric, analyst says
