While car sales have slowed down in the U.S. this year, Tesla is picking up speed. The electric car maker has officially passed Ford Motor in market share, and is now within striking distance of General Motors. As other carmakers struggle with stagnant and swollen inventories, Tesla is delivering more vehicles than ever. Can Elon Musk’s company keep demand up?
What Can Traders Expect From Tesla in the Future?
Up until now, Tesla has been seen as a novelty. Traders have considered Elon Musk’s vision of the future, filled with electric cars, as a long time off. But Elon Musk and his company are making that future happen today. Tesla saw its first-quarter sales go up 69 percent as the company delivered more than 25,000 vehicles — a company record.
The scary thing? Tesla wasn’t even up to full speed.
Up until now, Tesla’s vehicles have essentially been working prototypes which have brought in revenue to keep the company working towards its real product: The Model 3. While the Model S sedan and Model X SUV have been popular, sales dropped in the fourth quarter of 2016 due to production problems as the company struggled to meet demand in the short term while moving to a new autopilot hardware. Those obstacles caused delayed deliveries, resulting in share prices falling almost 10 percent.
Now, however, the company is hitting its stride. Tesla just sold a 5 percent stake in the company to China’s Tencent Holdings for $1.78 billion, giving Tesla some much-needed capital with which to work, and access to China. Now, Tesla looks primed to rocket forward.
What’s to keep Tesla driving ahead?
Simply put, practice. Now that its production issues are handled, and delivery methods are stable and reliable, Tesla is ready to attack its Model 3 production. Whereas the Model S and Model X are luxury vehicles, the Model 3 is a mass-market, high volume, midsize sedan that is slated to go on sale in the U.S. in 2017. That car will cost significantly less than previous models, at just $35k before incentives.
But even more importantly, thanks to its new partnership with Tencent Holdings, Tesla now has access to the world’s largest auto market; China.
China has opened up its doors to foreign automakers under the condition that those carmakers partner with local companies to exchange technology and revenues. Without that partnership, Tesla would continue to be kept out of China. Now, though, Musk can start exploring a factory in China, meaning more production capability, along with a massive market.
Watch the news from Fox Business regarding Tesla’s market value:
With Tesla firing on all cylinders, the Model 3 on track, fresh investment, and a record quarter, Tesla is ready to roll. Expect shares of Tesla, Inc. (TSLA) to continue moving UP.
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