Tesla Motors Inc: Should Investors Worry About Tesla Stock?

tesla stockThis is The Big Challenge for TSLA Stock  

Tesla Motors Inc (NASDAQ:TSLA) stock has been inching upwards gradually after being pounded in the month of November. The uncertainties over Donald Trump’s presidency on the future of Tesla stock seem to have gone away and with Tesla Motors CEO Elon Musk now officially on the business advisory team of the president-elect, investors are turning their focus again on the one number that matters to them the most right now.

Tesla Motors will soon be announcing its Q4 deliveries and all attention would be on whether the company would meet its targets. Tesla had delivered approximately 24,500 vehicles in Q3, of which 15,800 were Model S and 8,700 were Model X. This was an increase of about 70% from last quarter’s deliveries 14,402. The company expects Q4 deliveries and production to be at or slightly above Q3 and it maintained the guidance of 50,000 vehicles for the second half of 2016. If there is any disappointment on this front, TSLA stock could be hit very hard.

Meeting or exceeding expectations is very important for Tesla at this time as it gets ready for more challenges in the year 2017. It is not just Model 3 but also SolarCity business and Gigafactory that Tesla CEO Elon Musk has to take care of. TSLA stock had started the year 2016 at about $220 plus level  and touched its lowest of around $140.0 in the month of February. Hence, the high volatility surrounding Tesla stock has been a major feature in 2016.

Going into 2017, should investors  worry about where the stock is headed next?

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Tesla Stock in the Year 2017  

Tesla Motors has just concluded its acquisition of SolarCity Corp which is expected to help Tesla save $150 million next year as well as bring about other benefits as outlined by Elon Musk. The company had also demonstrated the new solar roof tiles that would be available in 2017. The success of solar business is very important for Tesla and any negative development on this front would hurt TSLA stock further.  

Another critical focus in 2017 would be if Tesla can meet its production targets for its first electric car made for the mass markets – Model 3. The company has already received almost 400,000 reservations for Model 3 and this provided a good boost to TSLA stock this year. However, what investors would be looking forward to would be whether it can start production in the second half of 2017 and start first deliveries in late 2017, as promised.

Tesla Motors is investing heavily in the opening of more stores as well as expanding its Supercharger network, which is required if it wants to emerge as the supplier of mass market Model 3. The sales network is also important as it evolves into an integrated energy company providing clean energy solutions. The only problem is the expenses which are bound to remain high in 2017 and could impact TSLA stock.

Tesla stock has lost almost 11% in the year 2016 when the benchmark indices have ended in the green. Tesla CEO Elon Musk has a lot to take care of in the coming year besides racing against time to bring Model 3 to market in late 2017. But at present, if the company announces upbeat delivery numbers for 2016, Tesla stock is likely to soar.