Despite the turmoil from the novel coronavirus and recent social unrest, Tesla’s (NASDAQ:TSLA) Elon Musk is having a great year in 2020. Contrary to the chaos in the broader automotive market, TSLA stock has consistently defied gravity since hitting a low earlier in March. And this past weekend, Musk’s SpaceX successfully launched a two-astronaut crew to the International Space Station.
While SpaceX is a separate entity from Tesla, TSLA stock nevertheless saw a big move up to start the first session of June. Although we can’t know every investor’s motive for jumping aboard the electric vehicle maker, the weekend’s event represented a significant PR boost for Musk and his leadership.
After all, SpaceX means more than glorifying one person’s accomplishments. With the company facilitating a successful docking with the ISS, it brought America back into the space race. As SpaceX’s website declares, this event is a foundation for other major ambitions — including manned missions to the moon and Mars.
While it may seem like science fiction, this is a very serious business.
For now, though, investors who want a piece of Musk’s brilliant mind can only practically do so through ownership of TSLA stock. However, this isn’t a bad gig. Like its orbital counterpart, Tesla has given the U.S. automotive market a relevancy that neither Ford (NYSE:F) nor General Motors (NYSE:GM) could achieve.
Additionally, Tesla’s use of electrically powered vehicles helps insulate American industries from the oil market’s geopolitical pressures. While cheap oil prices help drivers, they hurt domestic oil jobs. But as we move toward an electrical future, TSLA is an important cog in energy independence.
Autonomous Tech Is the Next Step for TSLA Stock
Sure, the above qualities and tailwinds substantially bolster the bullish argument for Tesla. But I’m mostly interested in shares because of the company’s leadership in the autonomous vehicle revolution. It’s really the next logical step for the trailblazer.
Don’t get me wrong. I love that Musk was able to provide NASA a huge boost, laying the groundwork for future space exploration projects. Additionally, once the U.S. mainstreams EV infrastructures, we will suffer significantly less from geopolitical rumblings. But these are also very long-term trends. Over the next few years, what will support the next phase of TSLA stock is AV tech.
First, Tesla has demonstrated that combustion-based cars won’t indefinitely have a monopoly on the automotive market. Indeed, Tesla’s EVs deliver high performance and practicality, all wrapped in an exceptionally sleek and attractive chassis.
Second, the automaker will prove that you won’t even need to drive the car to get around. By accomplishing this, Tesla will completely overturn the combustion-engine paradigm.
Better yet, that day may be sooner than you think. According to auto enthusiast magazine Car and Driver, Tesla’s Autopilot is one of the most advanced systems that feature some elements of autonomous driving capabilities.
Now, one of the weaknesses of AV tech is inclement weather, which can wreak havoc on cameras and other sensors. However, researchers at MIT have come up with a possible workaround using ground-penetrating radar. In other words, there are multiple synergies available for providing comprehensive solutions.
Additionally, startups like Comma.ai have demonstrated that you don’t need bulky, convoluted systems to create competent AVs. Since Elon Musk has already proven that he can send astronauts into space, figuring out a true autonomous solution shouldn’t be too difficult.
A Pandemic-Based Catalyst?
Of course, the biggest question for TSLA stock — assuming development of AVs — is will the consumer come? It’s one thing to offer a remarkable innovation. It’s quite another for people to willingly adopt it.
Interestingly, a 2019 University of Washington study revealed that most people would prefer to drive themselves rather than let a computer take the wheel. Further, only a small percentage of Americans showed willingness to buy AVs.
However, these surveys were conducted before the pandemic. With Covid-19 completely changing the social framework, we could see interest jump much higher.
Obviously, this would have big implications not only for TSLA stock but for ride-hailing companies like Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT). One of the main roadblocks to normal travel is fear of infection, especially in close quarters. But with AVs, at least when you’re on the road, you won’t have to worry about this.
To summarize, although 2020 has been a rough year so far for all of us, innovation continues to move forward as it always has. And with Tesla in particular, the wind is moving in the right direction.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
