Have you already invested in Tesla stock?
Or are you waiting for the plunge? or are you interested in buying Chinese EV stocks – NIO or XPENG?
Well, Tesla’s market cap has increased 10 times this year alone. This currently represents between $54 billion and $540 billion.
So where is Tesla stock headed with the recent rally? If you ask me, no one knows. Not even Wall Street analysts.
Every time Tesla makes a move, the stock goes crazy. And who still cares about valuations? The PE ratios are crazy whether it’s Tesla or NIO.
Will Tesla reach $750, or even $1,000? I’m not sure.
And besides, Elon Musk is now officially the second richest person in the world. He is now behind Jeff Bezos (founder and CEO of Amazon) and ahead of IT veteran Bill Gates. (180B to 127B is the difference between Bezos and Musk).
Also keep in mind that Elon’s compensation is all in the form of stock. He receives an annual salary of $0 or any other incentive. The deal is that if Tesla reaches a market cap of $650 billion, Elon would get $54 billion worth of stock as a reward :).
The deal was made when Tesla had a market capitalization of around 54 billion (early 2018) and for a period of 10 years. But the irony is that in just 2 years (less than 2 in fact), Tesla has already reached a market capitalization of $540 billion. So, will Elon soon be the richest man? Well, it looks like it. If Tesla stock reaches or exceeds $970, there is a good chance that Elon will be the richest man, surpassing Jeff Bezos. Of course, this also depends on Amazon’s stock price.
Additionally, Elon is also the founder and CEO of SpaceX. Although it has nothing to do with Tesla or a separate entity, it will one day be linked to Tesla.
After all, Tesla is a technology company. In 2020 alone, Elon gained $100 billion in personal wealth. This is the fastest wealth created in human history. It took Jeff almost 20 years to build $100 billion from Amazon.
Recap of Tesla Stocks This Year (So Far)
The screenshot below is of Tesla stock, trading on August 21, just before the 5:1 split.
Just look at this massive increase from $500 to $2,000 in a matter of days. Now it’s 4X in a few months.
The reason I wanted to bring this screenshot now is simple: Tesla is back to its all-time highs and is trading around $570 today. So, can we likely see the same rise again due to the inclusion of the S&P this time? Can buying the S&P trigger a $1,500 price move again?
Well, wait and watch! December 21 is the date to watch.
Don’t forget that on December 21, Tesla will be added to the S&P 500 index.
With the inclusion of the S&P 500, index funds and mutual funds combined will buy stocks en masse. (About $6 trillion worth of stock)
When Tesla drives, it’s always a pattern! Better to integrate quickly if you want to and believe in the future prospects of the company.
PS: Rob from the YouTube channel “Tesla Daily” always talks about Tesla. Don’t miss this video below to learn how the inclusion of the S&P 500 affects Tesla’s stock price and its exceptional free float. Also subscribe to his channel if you are a bull or a Tesla fan. It’s definitely worth it!
Just a few days ago, Tesla, which had bottomed at around $320 (after the stock split), was trading at $405 before the S&P 500 news broke.
Since then, in a few days, the stock has risen to $570. This represents a return of almost 40% in less than 2 weeks.
Latest news from Tesla China (Big One actually)
The latest news is that Tesla is planning to build a factory to produce Supercharger stations in China.
The new factory would be located near Gigafactory Shanghai and could produce up to 10,000 charging stations per year.
Tesla’s new factory could come into operation as early as February 2021.
The news came just in time as Chinese EV stocks continue to dominate the stock market – NIO, XPENG, Li, etc.
Remember, Tesla signed a 50-year lease with the Chinese government for the land purchased for Gigafactory Shanghai. They will therefore stay in China whatever happens and 10,000 supercharges per year is only the beginning!
While all other tech companies, including Apple (5% market share in China), Facebook, Google and Amazon, are struggling to thrive in China, just look at a Tesla. They do this well by dominating space before others even try to catch up.
Tesla now has a clear advantage in capital, technology and is first to market. By the time the smaller players are ready, Tesla will have captured the Chinese market on a large scale.
This is also the case for Europe.
While NIO plans to enter Europe in the second quarter of 2021, Tesla is already building the Gigafactory in Berlin and will begin production by summer 2021.
It wouldn’t be surprising if the next few months see the same results for Tesla China, as Gigafactory Shanghai plays a larger role in the company’s Model 3 exports.
This was hinted in recent reports from local Chinese media agencies. Citing industry insiders, reports note that Tesla China aims to produce 550,000 vehicles in 2021, of which 300,000 will be Model 3s. And of this number, 100,000 will be exported. – Teslarati
Other Tesla China news (what we already know)
Looks like Tesla and Elon know the importance of the Chinese market. After all, it is the largest consumer market in the world. Everyone wants their piece of the pie!
This is the only reason why Tesla is making the right decisions in first establishing the factory and now with the superchargers in place.
Then there were the price reductions to benefit from the subsidy and the Chinese version of Tesla.
Additionally, cars built in 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 hit the $1 million mark in terms of cars sold.
Final Thoughts
Always invest in market leaders. Whether it’s Apple, Microsoft or Tesla.
Invest in companies whose industry you understand and always read the Investor Relations page to learn about the company and the products it makes.
Invest for the long term to reap the rewards.
Short traders often make money quickly. Options trading can swing in either direction. For example, when Tesla shares were split, they were around $450, then quickly shot up to $500 only to drop back to $320 (when the S&P non-inclusion news broke).
Don’t go into FOMO when the stock price is falling. Unless you sell the shares, you will not incur any loss. Provided the stock rebounds, you are on track to make a profit.
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, you know Elon Musk, you have the market leader Tesla, their Innovation and Battery Day event recently was excellent, Tesla is American, their financial statements are good.
Are you serious about investing your money in NIO? Think about it. The choice is yours. Because one fine day, all the gains can be realized. Slow and steady gains are always the key to long-term wealth creation. When you sleep at night, your money should be well invested and safe for the long term.
Thanks for reading! Please let me know your comments though below.
