It is estimated that the global electric vehicle market is going to grow with a 29% compound annual growth rate (CAGR) in the next five years. So, it is obvious that the companies working in the manufacturing of electric vehicles, battery, and energy storage would show significant growth in the future and Tesla (TSLA) stock is the leading company among them.
Tesla, Inc. (TSLA), founded in 2003, is primarily working in the designing, developing, and manufacturing of electric vehicles in the United States and across the globe. TSLA stock is currently trading with $616.00 per share price, having an average trading volume of 30,955,950 shares a day and a market cap of $595.039 billion. Let’s take a closer look at Tesla stock.
Tesla Business in China:
Though the certain restriction in China has affected the Tesla business to some extent, analyst’ estimates show that the overall electric vehicle sales in China would likely increase by 5% to 10% in the next 10 years and acting as the major contributor in the manufacturing of electric vehicles, Tesla stock would get the maximum benefit in the future. According toChina Passenger Car Association (CPCA), Tesla delivered 33,463 vehicles in May 2021 representing a 295 monthly jump. Tesla delivered About 185,000 vehicles in the first quarter of 2021.
Performance in Covid-19:
In the pandemic era, Tesla stock sold about half a million cars across the globe which is not a usual number in the era where the cars were parked in the garage due to imposed covid-19 restrictions by governments. One analyst has projected Tesla deliveries to be more than 850,000 in the year 2021 which is far more than 500,000 deliveries in the last year.
First Mover Advantages:
TSLA stock has 25,000dedicated Supercharger stations installed and also leading in the manufacturing of autonomous vehicles as it has collected 3 billion miles of driving data as of March 2020 which is 150 times more than the data collected by Alphabet’s Waymo. Besides this, Tesla CEO Elon Musk is smart enough to devise the strategies in order to leverage the business.
Financial View of Tesla stock:
In the first quarter of 2021, TSLA stock reported $10.39 billion in revenue representing a 74% increase over the year. Earnings per share have surpassed the estimates of 73 cents per share to reach 93 cents per share and the net income of $438 million was generated in the recently reported quarter.
Future Plans:
The new version of the Model S sedan has started to deliver in May 2021 and Model X deliveries will initiate in the third quarter of 2021. Furthermore, Tesla is also planning to launch an autonomous ride-hailing network in the future that could result in$1 trillion profit by 2030 according to Cathie Wood, CEO, and founder of Ark Invest.
Competitor Analysis:
TSLA stock is now facing a great rivalry in the automobile industry as companies like General Motors (GM), Ford, Inc (F), and Volkswagen are spending billions in the manufacturing of electric vehicles. These companies are well established and have a decade of experience in the automobile industry. Furthermore, BYD, Nio, and Xpeng are giving tough times to Tesla stock in the Chinese electric vehicle market via investing heavily in order to increase their market share. Another weak point of Tesla stock is that its share in the global market is less than 1% which is still very low as 70 million to 80 million new cars have been sold every year.
Conclusion:
For most of Tesla’s business, it has been unprofitable for investors but its performance in the last few years is exceptional. Though it is acting the lead role in the manufacturing of electric vehicles still it has a low global market share in the automobile industry. If it goes with the current pace, it will generate a lot of revenue in the future but investors should keep in mind that Tesla alone is not playing in the industry as many well-established EV stocks are present in the play.
