Tesla (NASDAQ:TSLA) shares closed at $909.68 last Friday, an all-time high. Things have gotten even hotter since, with TSLA stock climbing 45% year-to-date to $1,055 (at the time of this writing).
The company now has a trillion-dollar market cap. Impressively, shares have now rallied more than 85% since hitting a 2021 low in early May. The company’s Q3 EV production was up 64% year-over-year, despite chip shortages that have roiled the industry.
Adding to the hype, the company announced record Q3 earnings results last week. TSLA stock seems unstoppable at this point.
So with all of that hype in mind, one question arises. Will this EV superstar stock run out of momentum?
Tesla CEO Elon Musk has said he thinks TSLA stock will hit $3,000 if employees “execute well.” However, the company is already worth more than the next six biggest automakers combined. Those automakers are turning to EVs as well, and already eating into Tesla’s marketshare.
Let’s consider if there’s still time to get onboard the Tesla stock train, or are its days of heady growth over.
TSLA Stock Rises on Record Third Quarter
Last week, Tesla reported its Q3 earnings. In a record quarter, the company reported $13.76 billion in revenue. That beat analyst expectations of $13.63 billion. Net income hit $1.62 billion, compared to $331 million a year ago. Analysts were looking for adjusted earnings-per-share of $1.59, but Tesla’s EPS of $1.86 beat that by a wide margin. Looking forward, the company says that it expects to hit 50% average annual growth in vehicle deliveries for multiple years.
Speaking of that growth, prior to the earnings Tesla released its Q3 vehicle update. The company produced 237,823 new EVs during the quarter (with deliveries of 241,300). That is a big increase over the 145,036 produced (and 139,300 delivered) a year ago.
TSLA stock ended up closing up 3.25% the following day.
Switching Up Battery Formulation and Cybertruck
Two big factors could have a material impact on TSLA stock over the next year.
The first is the Cybertruck, Tesla’s hotly anticipated EV pickup truck. First announced in 2019, the Cybertruck was supposed to be entering production by late 2021. In September, Tesla delayed that until into 2022. The problem there is that North American auto makers — determined to protect their cash cow pickup truck business — have EV versions of their own coming next year. There are also EV startups hoping to make a splash with battery-powered pickup trucks.
If Tesla can have the same impact in the pickup truck world that it has with electrified cars and crossovers, TSLA stock is going to be sitting on dynamite. But if it gets beaten to market, the battle to win over pickup truck buyers is going to be a lot more difficult.
Another significant development in the Tesla story was the company’s announcement that it plans to switch all Standard Range vehicles to Lithium Iron Phosphate (LFP) batteries. This move has advantages and risks.
On the plus side, the LFP batteries are cheaper to produce and more stable — so they’re less prone to fires. However, they are heavier than current batteries, they don’t perform as well in cold weather and, at the moment, 95% of global production for LFP batteries is based in China.
The move is a gamble.
The Bottom Line on TSLA Stock
Tesla has more than its fair share of detractors. CEO Elon Musk’s behavior has cost the company credibility and cash in the past. As long as he is still running the company, he adds an element of volatility to TSLA stock. NYU Stern university professor Scott Galloway has been famously predicting Tesla’s comeuppance for years.
It’s also impossible to overlook that fact that the EV market — that Tesla once had essentially to itself — is exploding. Will the company be able to continue to dominate, or will it eventually be left behind?
The company continues to defy doubters.
I suspect this Portfolio Grader B-rated stock still has gas in the tank (or charge in the battery pack). Just be aware that now the EV age is truly launching and Tesla no longer has the playing field to itself. The days of heady growth are probably in the rear view mirror.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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