Tesla On The Rise
Table of Contents :
Latest News.
CyberTruck Coming.
Financials.
New Developments.
Long-term goals.
My Perspective.
Disclaimer.
As Investors you might have heard the exciting news, that Tesla stock is on the rise again.
Don’t you think, the time come to seize this incredible opportunity and become a part of Tesla's growth story.
Latest News
The latest possibility is about Tesla start building a new Indian Gigafactory.
I know nothing is announced yet, but Elon hinted about expansion into the country.
They held high-level meetings, where the relentless pursuit is to establish a presence in Indian auto market.
Surely this expansion makes sense, as it could rival China while establishing another low cost manufacturing base for the company.
Remember while expanding into a Mexico, similar news creeped up that was eventually confirmed by Tesla.
Also, seven major auto makers are coming together, to build an alliance to challenge Tesla’s EV charging dominance in the US.
CyberTruck Coming
Tesla recently announced another milestone, building their first Cybertruck at Giga Texas.
Surely, it is behind schedule but could be a game changer for Tesla.
Some of them are being tested on the roads, while others were spotted in New Zealand for winter snow testing.
The final specifications and prices on the cyber truck are not public yet, but I believe they will price it competitively to Ford’s F150.
Tesla could possibly start delivering cyber trucks later this year, but I think much more fine-tuning needs to be done in the supply chain while ramping up production.
Just as a sidenote, over 1 million bookings for it shows huge demand which is good for Tesla stock.
Financials
Tesla showed exceptional Q2 performance, as far as deliveries production and revenue is concerned.
Having made about 480,000 EVs this quarter, they produced just 82,000 vehicles three years ago.
Tesla reached a revenue of about $25 billion, a growth of 47% year over year.
But high inflation and rising interest rates, do pose some challenges.
To spur demand and make their EVs more affordable, Tesla have been reducing prices that negatively affected margins.
This reduced profitability is a concern for Wall Street, but Tesla remains the only profitable EV maker, or for that matter, the most profitable automaker on the planet.
New Developments
Tesla announced their new innovative electric motor design, where they are talking about eliminated the need of any rare earth elements.
This revelation begs the question:
what alternative will they employ?
Experts unanimously are suggesting ferrite magnets as the ideal solution, because of affordability and composition of iron oxide.
However, relying solely on China for over 95%of global rare earth metals, do pose some geopolitical risks.
Mining them in the US and Europe can be done too, but is costly due to stricter environmental regulations.
Adding to this predicament, Beijing is now exploring options how to put export restrictions on certain rare earth elements, may be to prove a geopolitical point.
Long-term goals
Tesla has set an ambitious target of manufacturing 20 million cars by 2030, that is why they are investing heavily in new gigafactories worldwide.
Giga Mexico, their latest project is to become operational within the next year.
Furthermore, they have initiated early discussions about a potential expansion into India, or even France.
Also they are planning to double giga Berlin to make over 1 million EVs
Elon has put development of autonomous driving technology, and subsequently robotaxi service as a long-term goal.
He believes, there will be an limitless demand for this service in the future.
And to fulfill this goal, Tesla is investing over $1 billion in their advanced supercomputer named Dojo.
My Perspective
Elon dismisses short-term challenges that Wall Street is obsessed with, and views them as mere bumps on the road towards Tesla's ambitious vision.
I believe, Tesla has enormous potential to grow, and could potentially achieve a 5x to 10x from its current valuation.
Temporary fluctuations in margin and profitability pale in comparison to the bigger picture, where autonomy and scale of production will render these numbers irrelevant.
I think, Tesla's financial position will strengthen with time because of their huge free cash flow, thus sustaining a costly EV production cycle.
This will help them to sustain investments in cutting-edge technologies, which have been crucial factors behind their exponential growth
over the years.
Disclaimer :
As a disclaimer, I’m not a financial advisor please consult one before investing based on your personal financial situation.