If there’s one thing all of Wall Street should have learned by now, it’s don’t bet against Tesla Motors (TSLA) and its genius CEO Elon Musk.
So, when Musk sets his sights on a million Tesla’s on the road by 2020, you had better check your rear view mirror — because a Tesla is probably about to pass you.
According to the Wall Street Journal, Tesla’s million-vehicle march was part of a forecast from Tesla’s chief technical officer, JB Straubel, during a conference Monday in Washington, D.C.
The electric carmaker doesn’t plan on hitting that million vehicle mark by just its high-priced luxury flagship Model S sedan. To get to a million, Tesla will have to achieve success with two new offerings — the Model X crossover and the budget-priced Model 3 lineup.
Tesla’s New Lines
Tesla already has a specific timeline on the Model X debut. Last week, at its 2015 annual shareholder meeting, Musk said that delivery of the all-electric SUV will begin in late Q3. My read is likely mid-September or early October.
The delivery date for the Model X has been anything but smooth, as Musk and company unveiled their plans for the crossover in February 2012. At that time, Tesla was expecting a 2013 delivery date. Now, however, the company says it has ironed out its issues with, among other things, problems with the wing-style, or “Falcon” doors.
As for the Model 3, or third-generation line of Tesla all-electric vehicles, here the goal will be to create an affordable Tesla for the masses. With a target release date set for 2017, the Model 3 offerings are expected to cost about $35,000, and provide drivers with some 200 miles worth of battery range.
The Model 3 lineup is expected to include both a sedan and a crossover, but at lower price points (and presumably with fewer frills) than its higher-end Model S and Model X brethren. Together, Tesla hopes to reach its goal of building some 500,000 units annually, and to reach the million-vehicles-on-the-road milestone in just the next five years.
For TSLA shareholders, the bold million-vehicle target, along with the plans for the new product lineup, has helped drive shares up nearly 34% over the past three months.
TSLA now trades well above its 50- and 200-day moving averages, and now has approached its highest level since September.
Although currently at $262, TSLA remains well below its all-time closing high of $286.04 on Sept. 4, 2014. However, more good news on the vehicle front, and/or the Gigafactory front and on the earnings front, could easily electrify the shares to new, all-time highs.
A Very Bullish Outlook
In Wednesday’s trade, TSLA vaulted nearly 3% on the power of positive comments from Ron Baron of Baron Capital.
In an interview on CNBC, the influential analyst said, “I love Tesla. I think we are going to make between 10 and 20 times our money in the next 10 years. Tesla is a huge, huge opportunity.”
So, what about Tesla’s target of selling half a million cars annually by 2020?
According to Baron, that number will likely be reached much earlier: “This year they’re going to do 55,000 cars … they think they are going to do half a million cars a year by 2020, and I think they’ll do it a little bit faster.”
Baron went on to say that he expects the financial picture for Tesla to shine over the next five years and beyond. “In 2020, they are going to be doing $35-$40 billion (revenue) and making $6-$7 billion in profit … I think that it is going to be valued for $120 billion in four or five years.”
Now that is driving the bullish point home on Tesla’s future.
As of this writing, Jim Woods was long TSLA.
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