Tesla Stock Has Texas-Sized Gains Right Around the Corner

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2022 promises to be a year of exciting developments for fans of the electric vehicle (EV) race. Tesla (NASDAQ:TSLA) continues to dominate the space but faces increasing competition. Indeed, Ford (NYSE:F) and Toyota (NYSE:TM) are taking steps to compete with the EV giant. So far, Wall Street likes what it sees. But the company that gave rise to the EV race isn’t showing any signs of slowing down, even as tech stocks slump today. Tesla stock has seen plenty of turbulence since 2022 began, but investors shouldn’t be worried. We may have just gotten an unexpected preview into its plans for the year.

Interior of the Tesla Model 3
Source: Khairil Azhar Junos/Shutterstock.com

What’s Happening With Tesla Stock

Despite rising this morning, Tesla stock has been falling throughout most of the afternoon. As of this writing, it is down 0.77% for the day. These recent decline patterns have pulled it down by 1.15% for the week. However, it remains in the green by almost 16% for the month.

Tesla’s innovative technology has captured the fascination of many fans. Thousands have subscribed to the YouTube channel of Jeff Roberts, who provides drone footage of Tesla’s manufacturing facility in Austin, Texas. Today brings an exciting announcement for fans who have been awaiting news of the company’s Model Y. Roberts released footage of the facility that showed a row of new Tesla SUVs that match the description of the Model Y.

Why It Matters

EV aficionados have been eagerly speculating on the release of the Tesla Model Y for months. As InsideEVs notes, 2021 ended with a rumor that production was about to start within the first week of the new year after an industry insider tweeted about it. Just 10 days later, WedBush Securities analyst Dan Ives hinted that Model Y production was slated to begin soon. If Roberts’ footage is any indication, production may have indeed started.

A noted voice on Tesla stock, Ives has good reason to be excited about such a development. The company began 2022 with a bang after announcing it had exceeded expectations on deliveries for the previous quarter. And while this was great news for investors, critics still worried that the company might not be able to keep pace with demand.

These concerns are not unfounded. EV demand is growing rapidly. A poll from Morning Consult has revealed that more than half of the adult U.S. population is considering buying an EV within the decade. That number is likely to grow as environmental concerns rise and increases in EV production drives prices down. But supply chain constraints combined with the labor shortage have posed difficulties for EV companies in the U.S. and beyond.

Assuming that Tesla is indeed ramping up production of the Model Y, investors should be assured that it is likely to keep pace with demand in 2022. The recent delays regarding Tesla’s Cybertruck raised some eyebrows on Wall Street, but demand for a four-door passenger vehicle like the Model Y promises to be significantly higher. It’s also worth noting that this new addition to the Tesla family is less expensive than the Model S sedan. Pre-order prices are set at $58,990 as compared to the latter’s $94,990 price tag.

What It Means

The way it looks from here, Tesla is going to be prepared to meet the year’s demand. The Model Y’s low price point will open it up to a new class of consumers eager to own the trendiest car in the EV race. Additionally, its larger size will make it more appealing to families.

All this bodes well for Tesla stock. While the company hasn’t rolled out the Model Y yet, when it does, the stock will react well. Investors can relax as Tesla gets ready to take the market by storm yet again.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.


Article printed from InvestorPlace Media, https://investorplace.com/2022/01/tesla-stock-has-texas-sized-gains-right-around-the-corner/.

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