Tesla Stock Breaks Previous Records, Investors Bullish over EV Stocks

Tesla stock price jumped to a new all-time high of $530 as the largest electric vehicle company accelerated last week’s gains by another 8%. Investors appear bullish over the future fundamentals of electric vehicles because advanced countries’ are aggressively heading towards their zero-emission policy.

Countries all over the world have started pushing people towards electric vehicles to reduce pollution.

For instance, Britain is planning to completely ban the production of gasoline cars by 2030, with the strategy of promoting electric vehicle production.

Strong demand is the biggest price catalyst

The market analysts are calling strengthening demand for EV vehicles as the biggest catalyst for Tesla stock in the months ahead.

“With the sustained path to profitability and S&P 500 index inclusion achieved, the Tesla bull story is now all about a stepped-up EV demand trajectory into 2021. Overall we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025,”

writes analyst Dan Ives.

Advanced countries including the US, Europe, and China would be the biggest demand drivers. Meanwhile, the production of electric vehicles is significantly below the overall demand.

Tesla has promised to deliver 500,000 electric vehicles this year despite supply chain disruptions due to the coronavirus pandemic.

Wedbush has provided a $1000 price target to Tesla stock, indicating almost 100% upside from the current level. Tesla stock has already gained 600% price appreciation in the past twelve months.

Morgan Stanley analyst has presented interesting facts about the growth potential of Tesla. The analyst Adam Jonas says Tesla’s move towards software business along with insurance business would significantly boost its revenue base in the days ahead.

“Tesla has continued to develop its services/platform business to a level where we feel that it is appropriate for investors to consider to change how they model the company’s revenue and profit streams,”

Adam Jonas said.

Siraj Sarwar - Lead Analyst
@tradethedayfx
Siraj Sarwar has been performing analysis on the stock market, equity research and general business consultation. He regularly contributes articles on economics, commodities, and equities to the world's leading websites, including Trade the Day, SeekingAlpha, TheStreet, and MSN.
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