TSLA Stock Could Skyrocket
Tesla Motors Inc (NASDAQ:TSLA) scored big after unveiling its mass model sedan on March 31. The company quickly racked up more than 276,000 orders for the Tesla “Model 3,” driving TSLA stock up eight percent on the news.
But that spike is a drop in the ocean compared to what lies ahead. Tesla is, after all, the first successful American car company in over 80 years. Not since the inception of General Motors and Ford Motors has the United States seen a mainstream carmaker.
That is until Elon Musk stepped onto the scene. This guy is something special; he can build Internet companies, payment systems, electric cars…heck, he can probably build spaceships. There’s no ambition too big or too bold for this guy.
People laughed, they laughed, at Elon Musk when he said Tesla would build 500,000 cars per year by 2020. There’s no way that itty bitty Tesla could possibly draw that kind of demand, right? Sorry to disappoint the bears, but this past week has shattered that myth.
How can anyone continue to doubt the growth potential of this company after it secured 276,000 orders in less than a week? A week! Just to give you a sense of how embarrassing that is to all the naysayers, listen to this: BMW only sold 95,000 3-series sedans in the U.S. in 2015. Only 95,000 compared to Tesla’s 276,000 Model 3 pre-orders. (Source: “Tesla Motors Says Reservations for Model 3 Surpass 276,000,” The Wall Street Journal, April 3, 2016.)
Both cars fit into the same category and the same price range. They are a bridge from regular sedans to luxury sedans. They are sleek, they are stylish…and it turns out more people want the Tesla than the BMW. What does that say about the state of the U.S. automobile market at present?
I know what it should tell you. It should be obvious to anyone with eyes and a brain that Elon Musk has this one in the bag. He promised 500,000 cars by 2020 and he’ll probably deliver on that promise. You know why? Because this is Tesla’s chance to earn its place in the pantheon of great carmakers.
It won’t be easy, and there are certainly more questions to be answered, but Tesla has earned the benefit of the doubt by achieving the impossible. No one thought it was possible to start a successful car company in the United States. Time and time again, this guy and this company have done the unthinkable.
Why would anyone think they couldn’t do it again? It’s clearly not a fluke!
Think about the charging stations. A lot of people were complaining that they couldn’t drive too far away from their houses, so Tesla went and installed 3,600 charging stations across the United States, with another 3,600 coming in the next few years.
Tesla also had a problem sourcing lithium ion batteries. Did Elon Musk sit back and think, “let’s just stick with niche market vehicles?” I mean, he could have easily chosen that path and built a beautiful luxury brand, but it would have meant accepting defeat. And that’s not in his DNA, so he built the “Gigafactory.”
“It will make more lithium-ion batteries than any other factory combined,” Musk said of the Gigafactory at the Model 3 unveiling. “It will also produce the most advanced battery cell of its kind [and it’s] already operational today.” (Source: “Live Blog: Tesla Unveils the Model 3,” Fortune, March 31, 2016.)
This guy makes things happen by sheer will and hard work. That kind of urge to win may not make him the person you want to have as your friend, but it certainly makes him the person you want running your company. I’ll put it to you this way: a bet on TSLA stock is a bet on Elon Musk.