Buzz about Tesla stock has been spreading across the Internet like wildfire, especially since the CEO himself described the prices as “kinda high” after the stock closed at $277.39 on September 5. A confluence of events is impacting these prices and causing them to fluctuate greatly. For example, the state of Nevada just duked it out with four other states to win a Tesla deal for the “Gigafactory,” a manufacturing plant that will surely bring a significant rise in job availability to the winning state. Also, stock prices tend to jump and fall based on the latest legislative decisions regarding Tesla’s ability to sell cars directly to consumers. However, many investors believe that Tesla is set for immense long-term growth.
Here are three points to consider when it comes to Tesla’s stock prices.
Think Tech, Not Automotive
Tesla’s stock price fluctuations and rapid growth resemble the ways tech company prices leap, such as Apple and Google. There’s no use comparing Tesla’s stock performance and growth to other automotive companies, such as Ford or GM. These automotive companies haven’t captured consumer attention like Tesla. Due to Tesla’s focus on electronic cars, they share consumer interest in multiple verticals. Startup and tech publications and audiences watch Tesla’s every move as they develop new battery technologies and announce additional mobile integration.
Preorders Demonstrate Support of Future Success
It can be very difficult to measure public faith in a company’s future. However, preorders can be a great way to gauge interest in upcoming products, such as the Model X, which won’t even hit the market until 2015. However, the Tesla Motors Club estimates that the company has received at least 12,000 preorders for this model. These figures, combined with the $228 million in consumer deposits reported by the company in June 2014, show an immense confidence in the company’s future.
Outselling the Competitors
There are many other electric cars on the market, including Nissan and Chevrolet selling their Leaf and Volt models. Tesla has managed to keep pace with these companies and even outsell them during key months. This is extremely interesting, especially since Tesla’s current offerings really only appeal to the luxury car audience. The Model S retails at $69,900 while the Nissan Leaf starts at $28,980 and the Chevy Volt starts at $34,185. Tesla’s ability to sustain such high numbers for units sold is a testament to this company’s popularity. It will be extremely interesting to see how the 2017 Model III fairs as the company gears up to sell an entry-level consumer vehicle at a $35,000 price point.
Tesla’s innovative technologies, legislative performances and rapidly growing stock values have this company poised for future success. They have quickly earned consumer support in their future endeavors, which is clear based on Tesla preorders, consumer deposits and their unit sales despite high price points. Also, the future Gigafactory is set to increase job opportunities and reduce the overall cost of producing battery packs for future Tesla car models. If you haven’t been paying attention to this company’s stock before, now’s the time to start.