Can Volatile Tesla Stock Gain Investor Confidence in 2017?

- March 8th, 2017

With declining sales, there was a lot of pressure on the car giant to bring its profits up to date, to be able to meet the shareholders’ expectations.

There is no denying the fact that Tesla (NASDAQ:TSLA) is all over the news ever since the start of 2017. Autonomous vehicles, coupled with connected cars and a series of cleaner/renewable energy are proving to be the high points for the car manufacturer. As these three points are considered to be the growth drivers in the oncoming years, there’s a lot riding on Tesla’s stock.
What does 2017 have in store?
2016 Q4’s stock performance has shaken the confidence of Tesla’s investors. With the declining sales, there was a lot of pressure on the car giant to bring its profits up to date, to be able to meet the shareholders’ expectations.
The company’s stock has been named as the top pick for 2017. Since Tesla Energy is not a part of the stock price currently, there is a lot of untapped potentials which is not being considered at the moment. With the launch of Model 3, these expectations are predicted to go even higher.
However, Tesla is yet to disclose the total preorder count received for its Powerwall 2. To obtain the Powerwall 2, customers need to place a deposit, which will give an inkling into the real deal behind Powerwall 2 success story.
With the ramp up of Tesla Energy and Model 3, there are high hopes for the company’s production. Tesla’s stock will be an Outperformer, with a price range of around $338. With Tesla’s battery prices accelerating every day, there are a lot of additional benefits which will coincide with the launch of Model 3. The combined sales should push the growth trends to the required limits.

Is the dream too far-fetched?

Putting all these contingencies to rest, there is a lot Elon Musk still needs to prove his worth. As per Musk, Model 3’s production is supposed to begin in 2017. However, for that to become a reality, Tesla needs a lot of cash to fund its aggressive approach to achieving its production targets. At the same time, SolarCity also needs to be integrated with Tesla’s profitability.
Considering the production numbers of Model 3, if everything goes as per plan, the company’s expects to meet 5,000 vehicles production on a daily basis. This way, the company will be able to produce 500,000 units in 2018, which will help it embark on a path of success.
At the same time, Tesla will need to invest in its sales and service model infrastructure. Maintaining 500,000 units is not going to be an easy task. As per a recent letter to the shareholders, the company confirmed that the repairs are minor, which can be performed remotely, to save costs. With this said and done, the company also hopes to produce glass solar roof tiles in the summer, to expand volume production by the end of 2017.
With all the factors taken into consideration, it’s only a matter of time, to figure out how well Tesla can live up to its promises.
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Securities Disclosure: I, Prashant Sharma, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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