Tesla Inc (NASDAQ:TSLA) Crosses the 25,000 Barrier in Q1
Tesla Inc (NASDAQ:TSLA) bulls are smiling all the way as the company frustrated Tesla stock bears by posting higher-than-expected delivery numbers for the first quarter. TSLA stock ended slightly in the green in Friday’s session. It closed at $278.30 and is likely to continue its upward march on the record numbers posted over the weekend.
Tesla Inc said in its press release that the company delivered a little over 25,000 vehicles in Q1. Out of these, about 13,450 were “Model S” and approximately 11,550 were “Model X.” With these numbers, the company has posted a new quarterly record, representing a 69% increase over the first quarter of last year. The company further emphasized that this was a conservative count as a car is counted as delivered only if it is transferred to the customer and all paperwork is correct. (Source: “Tesla Q1 2017 Vehicle Production and Deliveries,” Tesla Inc, April 2, 2017.)
Tesla Inc had missed its target narrowly last quarter, thereby raising investors’ doubts over the schedule of the “Model 3.” However, Elon Musk posted a string of tweets a few days back, releasing a teaser video and explaining the features of the Model 3, which reassured TSLA stock investors. Tesla Model 3 is seen as the future of the company, whose success depends on the success of Model 3—the first electric sedan aimed at the mass market.
Vehicle production and deliveries have always been a critical factor for Tesla Inc as Elon Musk has set ambitious targets for the electric car turned energy company, which has a historical record of missing its targets. With the goal of producing over 400,000 Model 3 cars by next year, the company needs to touch an average production of over 30,000 cars per month, which is way above the current numbers.
Although the “Gigafactory” production is on schedule and the company is not leaving any stone unturned to ramp up Model 3 production, only time will tell if Tesla stock bears grab another chance to get back in the game.
Good News on Tesla Powerwall
There was more good news for Tesla stock over the weekend. It was reported that a home builder, has decided to make the “Tesla Powerwall 2” standard in every new home it builds. This is the result of the efforts of Tesla Inc and SolarCity Corp (NASDAQ:SCTY) that have been pushing to include battery packs and solar panels in new constructions.
Powerwall 2 installations are being scheduled in April in Australia and Arden Homes, a Melbourne-based home builder, timed it with the announcement that this will be a standard feature in its homes. Installations are also expected to go up in the U.S. in April. (Source: “Home builder makes the Tesla Powerwall 2 standard in every new home,” Electrek, April 1, 2017.)
Just few days back, Elon Musk had made a bet that he could get a battery system installed and working within 100 days to help get rid of the blackouts in South Australia. In case Tesla could not do it, there would be no charges.
Musk has already stated that the demand for energy storage products shall rise exponentially in the coming years and this growth potential has also been responsible for the optimism surrounding Tesla stock. If more builders follow suit, the potential for Tesla energy products could be huge.
The One Persistent Risk with Tesla Stock
Although it looks as if nothing can go wrong with TSLA stock at the moment, as we have stated before, Elon Musk is the biggest strength as well as the biggest weakness of Tesla Inc. Earlier, there were rumors of Musk starting a Boring Company to dig underground tunnels to solve the traffic problems in Los Angeles. And now it has been confirmed that he is launching Neuralink, a company which will work to merge to the human brain with computers and machines. (Source: “Elon Musk launches Neuralink, a venture to merge the human brain with AI,” The Verge, March 27, 2017.)
Elon Musk likes to keep pushing the envelope as well as keep pushing himself to the edge—this may not appear to be that admirable a quality when the tide begins to turn against Tesla Inc. TSLA stock is most likely to grow, but with a lot of volatility, and not all investors can take this high level of risk.
The Bottom Line on Tesla Stock
Tesla Inc announced its capital raise recently to strengthen its balance sheet ahead of the Tesla Model 3 launch, and TSLA stock investors cheered the move. Another important development last week was the Chinese internet giant Tencent buying a five-percent stake in Tesla Inc, which makes the company one of the largest shareholders. The one positive outcome of this could be that Tencent helps Tesla strengthen its position in China, which could be huge for Tesla stock.
There is a lot happening at Tesla Inc and Elon Musk shall keep it going this way. If you are ready for this roller coaster ride, then as a Tesla stock investor, you will have a lot to look forward to.