TSLA Stock: This Is Why Tesla Stock Could Skyrocket in 2016

TSLA StockGood News for TSLA Stock?

Tesla Motors Inc (NASDAQ:TSLA) is the only car company synonymous with electric-powered vehicles. Big automakers used to think of the firm as an adorable little niche player, but that was before the rise of TSLA stock. Going public changed everything.

Most of these automakers, like Daimler AG, Toyota Motor Corp, and Mercedes-Benz, had invested in Tesla early on. They were using the company to source new technology, but they never really considered it a threat to their long-term survival.

It seems like they’re finally starting to understand just how wrong they were.

There’s been an abrupt shift in the relationship between Tesla and the industry’s heavyweights. It’s hidden in plain sight. Just think about how different the company must have looked to them in its early years. A lot has changed since then.


Daimler acquired a 10% stake in Tesla back in 2010. (Source: “Strategic partnership: Daimler acquires stake in Tesla,” Tesla Motors web site, April 20, 2010; https://www.teslamotors.com/en_CA/blog/strategic-partnership-daimler-acquires-stake-tesla.) The same day that deal was announced, Tesla issued a statement saying it had reached 1,000 orders for the “Model S.” (Source: “Tesla surpasses 1,000 reservations for Model S,” Tesla Motors web site, April 10, 2010; https://www.teslamotors.com/en_CA/blog/tesla-surpasses-1000-reservations-model-s.) There are now 100,000 Model S vehicles on the road.

Tesla also started shipping the “Model X” and opened a behemoth-sized battery factory in the Nevada desert. The company has made inroads into China and is ramping up production on all fronts, too.

By 2014, automakers started realizing that Tesla was no joke. Daimler divested its stake in Tesla, as did Toyota and the rest of them. (Source: “Toyota Confirms Sale of Part of Tesla Stake,” Wall Street Journal, October 24, 2014.) But the final cord was cut earlier this week.

Mercedes-Benz announced it will no longer get its drivetrain and battery packs from Tesla. Toyota had also been a customer of Tesla’s, but the company decided to internalize its own production process. To me, it looks like a battle tactic. (Source: “Tesla Is No Longer the Auto Tech Supplier It Once Was,” Fortune, March 8, 2016.)

Tesla had relations so long as automakers didn’t feel threatened. Now, automakers are cutting off a source of Tesla’s revenue, hoping cash flow issues will strangle the company. They’ve finally realized how important it is to invest in new technology, but it may be too late to stop the inevitable.

Don’t forget that until now, Tesla has been a luxury car maker.

It started with the “Roadster,” which was inaccessible to all but the wealthiest of Americans. Even the Model S and X are built for an elite slice of the population. But pretty soon, the company will unveil the “Model 3.” Now that’s a car with mass appeal.

I think the impending release of the Model 3 is why Daimler, Toyota, and most recently Mercedes-Benz severed their ties with Tesla. They’re gearing up for a drawn out war, but it might be too little, too late. There’s no holding back TSLA stock now.