Have you Invested in the Tesla stock yet?
Or are you waiting for the dip? or are you interested in buying the Chinese EV Stocks – NIO or XPENG?
Well, Tesla’s market cap has 10X this year alone. That’s all the way from $54B to $540B right now.
So, where is the Tesla stock heading towards with the recent rally? If you ask me, nobody knows. Not even the wall street analysts.
Every time Tesla makes a move, the stock runs crazy. And who cares for the valuations any more? The PE ratios are crazy be it Tesla or NIO.
Will Tesla reach $750 or even $1000? I’m quite not sure.
And BTW, Elon Musk is now officially the second richest person in the world. He’s now behind Jeff Bezos (Amazon founder and CEO) and has outpaced the IT veteran Bill Gates. (180B to 127B, that’s the difference between Bezos and Musk).
Also, remember that Elon’s compensation is only through stocks. He gets $0 annual pay or any other incentives. The deal is that if Tesla reaches a market cap of $650B, Elon would get $54B worth of stocks as a reward :).
The deal was struck when Tesla had a market cap of around 54B (early in 2018) and for the 10-year time frame. But the irony is, just in a matter of 2 years (less than 2 in fact), Tesla is already at a market cap of $540B. So, will Elon be the richest man pretty soon? Well, looks like. If Tesla stock reaches or goes beyond $970, chances are Elon will be the richest man surpassing Jeff Bezos. Of course, it depends on the Amazon share price as well.
Furthermore, Elon is also the founder and CEO of SpaceX. Though it has nothing to do with Tesla and a separate entity on its own, it will someday inter-link with Tesla.
After all, Tesla is a technology company. In 2020 alone, Elon’s made $100B in personal wealth. That’s the fastest wealth created in the history of mankind. It took Jeff almost 20 years to create $100B from Amazon.
Tesla Stock Recap This Year (Thus Far)
The below screenshot is of the Tesla stock, trading on August 21st, just before the split of 5:1.
Just look at that massive run-up from $500 to $2000 within a couple of days. Now, that’s 4X in a few months.
The reason I wanted to bring this screenshot now is simple, Tesla is back at its all-time highs and trading around $570 today. So, can we see probably see the same run-up again because of S&P inclusion this time around? Can the S&P buying trigger a $1500 price movement again?
Well, wait and watch! December 21st is the date to watch for.
Remember, on December 21st, Tesla is getting added to the S&P 500 Index.
With the S&P 500 inclusion, there’ll be massive stock buying by the Index funds and mutual funds combined. (Around $6 Trillion US dollar worth of stocks)
When Tesla runs, it’s always a pattern! Better get onboarded quickly if you want to and believe in the future prospects of the company.
PS: Rob from the “Tesla Daily” YouTube Channel nails it every single time about Tesla. Do not miss this video below to know how the S&P 500 inclusion affects the Tesla Stock price and outstanding float. Also, subscribe to his channel if you’re a Tesla bull or a fan. It’s well worth it!
Just a couple of days back, Tesla which had bottomed to around $320 (post stock split), was trading at $405 before the S&P 500 news first broke.
Since then, in a matter of a few days, the stock is back up at $570 dollars. That’s almost a 40% return in less than 2 weeks.
Tesla China Latest News (Big One Actually)
As per the latest news, Tesla is planning to build a factory to produce Supercharger stations in China.
The new factory is reportedly going to be located near Gigafactory Shanghai and is going to be able to produce up to 10,000 charging stalls per year.
Tesla’s new plant could go into operation as soon as February 2021.
The news came just in time as the Chinese EV stocks continue to dominate the stock market – NIO, XPENG, Li etc.
Remember, Tesla has signed a 50-year lease with the Chinese Government for the land they purchased for the Gigafactory Shanghai. So they’ll stay in China no matter what and 10,000 supercharges per year is just the beginning!
When every other tech company including Apple (5% market share in China), Facebook, Google, Amazon find it hard to thrive in China, just look a Tesla. They are doing it right by dominating the space even before others are trying to catch up.
Tesla has a clear edge now in terms of capital, technology and the first in the market. By the time the smaller players are ready, Tesla would have captured the Chinese market on a large scale.
So is the case with Europe as well.
While NIO plans to enter Europe in Q2, 2021, Tesla is already constructing Gigafactory Berlin and by the summer of 2021 will begin production.
It would not be surprising if the next few months would see the same results for Tesla China, as Gigafactory Shanghai takes a bigger role in the company’s Model 3 exports.
This was hinted at in recent reports from local Chinese media agencies. Citing industry insiders, the reports noted that Tesla China is aiming to produce 550,000 vehicles in 2021, 300,000 of which will be Model 3s. And among this number, 100,000 will be exported. – Teslarati
Other Tesla China News (What we know already)
Look’s like Tesla and Elon know the importance of the Chinese market. After all, it is the biggest consumer market in the world. Everyone wants their share in the pie!
That’s the sole reason Tesla is making the right moves in establishing the factory first and now with the supercharges in place.
Then it was the price cuts to be eligible for the subsidy and the Chinese version of Tesla.
Also, the cars built out of China are outsourced to Europe.
In case you’re still wondering, Tesla will easily hit the 500,000 vehicle mark this year. Next year, Tesla should easily achieve the million-dollar mark in terms of cars sold.
Always, invest in the market leaders. Be it Apple, Microsoft or Tesla.
Invest in the companies where you understand the business and always read the Investor Relations page to know the company and the products they produce.
Invest for the long horizon to reap the rewards.
Short traders often make quick money. Options trading can swing both ways. For example, when Tesla’s stock split, it was at $450 around, quickly rose to 500 to only fall back to $320 levels (when the S&P non-inclusion news broke).
Do not get into FOMO, when the stock price falls. Unless you sell the stock, you won’t incur losses. Provided the stock bounces back, you’re on track to gain profits.
Finally, Invest in high growth companies like Tesla.
After all, why do you want to Invest in NIO? You know the Tesla brand, you can see their cars around, you know Elon Musk, you have the market leader in Tesla, their Innovation and Battery day event recently were excellent, Tesla is American, their Financial Statements are good.
Do you seriously want to invest your money into NIO? Think it over. The choice is yours. Coz, one fine day all the gains can be done. Slow and consistent gains are always key to long term wealth creation. When you sleep at night, your money should be well invested and safe over the long term.
Thanks for reading! Please let me know your comments if below.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.