TSLA Stock Price Increases Over 19% This Past Week: Why It Happened

By Amit Chowdhry ● November 27, 2020
  • The stock price of Tesla Inc (NASDAQ: TSLA) increased from $489.61 to $585.76 over the past week. Here are some of the reasons why the stock price increased this past week.

The stock price of electric vehicle company Tesla Inc (NASDAQ: TSLA) increased from $489.61 to $585.76 over the past week. Here are some of the reasons why the stock price increased this past week.

Bullish Investor Report 

Wedbush Securities analyst Dan Ives released a bullish report about Tesla where he predicts that the company’s share price could double as the demand for electric vehicles globally will ramp up over the next five years. Specifically, the global demand for electric vehicles could reach 10% of auto sales by 2025 — up from the current 3%.

Ives increased his price target to $560 per share and a bull case scenario of $1,000. This is based on the expectation of the company achieving 1 million vehicles by 2023 (or even sooner).

“We believe this demand dynamic will disproportionately benefit the clear EV category leader Tesla over the next few years especially in the key China region which we believe could represent ~40% of its EV deliveries by 2022,” wrote Ives in the report via Fox Business. “Overall we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from about 3% of total auto sales today to 10% by 2025.”

Ives also noted that the Gigafactory in Shanghai — which first opened in October 2019 — is going to give Tesla a major competitive advantage over some of the domestic players like Nio, Xpeng, Li Auto, and BYD. Those rivals have also benefited from the traction of Tesla in the area.

Plus efforts in Europe for reducing carbon emissions and increased regulatory scrutiny is expecting to drive substantial demand led by France, Germany, Italy, and the UK. Tesla is planning for its Gigafactory in Berlin to start production in July.

Ives speculated that the Biden administration will potentially provide another boost for the EV space through tax credits and incentives, which would also lead to higher demand.

Market Cap Surpasses $500 Billion

Tesla had reported its fourth consecutive profitable quarter this year. And a stock split also drove up the demand for the stock price of the company. Plus the company stock is being added to the S&P 500.

In the past week, Tesla surpassed Berkshire Hathaway in market cap by hitting $500 billion and became the sixth-largest U.S. company after Apple, Microsoft, Amazon, Alphabet, and Facebook.

Elon Musk Becomes Second Richest Person

Due to the recent stock price surge, Elon Musk officially became the second richest person in the world. Now Musk has a net worth of over $132 billion. He is just right behind Jeff Bezos, who has a net worth of over $185 billion.

Much Longer Range Vehicles In The Pipeline

Tesla CEO Elon Musk recently said that the company is planning to release vehicles that have 700 kilometers in range and batteries for vehicles with 1,000 kilometers of range are in development.

“What we see is really the fundamental impediment to progress with batteries is the cost,” said Musk at the European Conference on Batteries event via Proactive Investors.

Here is a video of Musk speaking at the event:

 

Electric Car Chargers Coming To China

Tesla is planning to launch electric vehicle charges in China next year, according to sources with Reuters. In a document submitted to authorities in Shanghai, Tesla is planning to invest 42 million yuan (over $6 million) for a new factory to make the chargers (charging piles) near the car plant in Shanghai. As of right now, Tesla imports the chargers from the US — which are generally installed in charging stations or car parks.

Disclosure: I am a TSLA shareholder