Electric vehicle (EV) manufacturer Tesla’s stocks have no signs of slowing down. With a 390% rallying cry of its stocks in the stock market, it will potentially see the greater value, thanks largely to the company’s presence and market sales in Mainland China.
According to a report by Matthew Fox on the Business Insider, Wedbush Securities a private financial services and investments company, released a note late last week projecting a 71% increase in its stock value compared to current prices. This amounts to more than $3,000 a stock. It is a significant increase from the firm’s earlier bull case scenario of just only $2,500.
China and its role to Tesla’s continuous stock growth
Wedbush suggested that the company’s continued growth in the Chinese market will set the motion to the company’s next rally on the top of the stocks. Tesla is apparently the king when it comes to the country’s EV market and with the demand for the company’s Model 3 soaring higher and higher, coupled with recently imposed price cuts on the aforementioned models and the rest, concocts the ‘perfect storm’ as Wedbush puts it – and the key is for the company to monopolize on this.
The automaker is seen to deliver 150,000 units of the Model 3 after it opens its Gigafactory in Shanghai. The Model 3 units that will be sold in Mainland China will have higher margins compared to those sold in other parts of the globe, including the local market and Europe. This, according to Wedbush, will increase the profitability profile of Tesla.
In addition to that, the number of units sold in the country by 2022 is projected to comprise up to 40% of the company’s overall sales figures. Amidst the worldwide Coronavirus disease 2019 (COVID-19) pandemic, Tesla will be able to meet it's half a million goal of car deliveries, which could go up to a million annually in 2023.
The company’s continued efforts to innovate can also play a role in the company’s stock to possibly go up in value. There is still no concrete news yet about Tesla’s plans and research but speculations of its newest battery will be a game-changer in the industry. Experts suggest that the company will probably announce soon of its so-called ‘million-mile battery’ – a battery that will last decades and is seen to weather through an array of climates and terrain.
As of writing, the company’s shares increased 4% yesterday morning a few days before its scheduled implementation of the stock split scheme.