Tesla Soon to Be the Biggest U.S. Automaker?
Every time I drive my SUV, especially when I have to fill up the tank with premium gas, I quiver and think about downsizing to a smaller gas-efficient vehicle or some sort of hybrid.
I remember back more than a decade ago when Canadian upstart Ballard Power Systems Inc. (NASDAQ/BLDP) was all the rage on Wall Street, with traders driving up the stock price to above $100.00 in early 2000 on anticipation the company could develop the first hydrogen-powered cell for vehicles. Of course, as my stock analysis indicates, that failed, as Ballard was unable to develop a battery small enough to power the everyday car. The rest is history. Ballard is still hanging around, but it’s a non-factor in the alternative power sector for vehicles, based on my stock analysis.
As many of you already know, my stock analysis favors Tesla Motors, Inc. (NASDAQ/TSLA) as the big winner in the alternative power sector for vehicles. In a few short years, Tesla has become the next big technological innovation with its fully electric-powered vehicles. The Tesla vehicles look sharp and sporty and are gaining a wide acceptance based on the sales we are seeing.
I drove by a Tesla charging station the other day, and it looks impressive and innovative. Tesla is aiming to build a “Supercharger” network to cover about 98% of the United States by 2015. The Supercharger network can charge up a Tesla car via the changing of the battery pack and is free if you buy the more powerful battery. The whole process to automatically change the battery takes less than 90 seconds, according to the company.
Given the high price of fuel, the idea of not needing to pay to change your car’s battery pack is very attractive, based on my stock analysis. The Tesla vehicles cost about $50,000 and up. A move to below $40,000 would be intriguing and could easily ramp up the company’s sales growth, as my stock analysis suggests.
So what I initially thought was a long shot has turned out to be the real deal; albeit, I still wonder about its valuation, based on my stock analysis.
The most irritating thing is that we first saw the Tesla car on display in November 2012. The car looked sporty enough, but I was not convinced it could go mainstream. My young son thought it was a beautiful, sleek vehicle and encouraged me to buy some shares. Of course, why would I listen to a 12-year-old telling me what to buy? Anyway, Tesla was trading at a mere $33.00 at that time. This past Thursday, the share price of Tesla surged to an all-time high at $215.00. Heck, listening to my son then could have paid for his college education!
In a few short years, Tesla’s market cap has surged to around $25.0 billion, which is amazing, given its short history and the fact the company is still not a big revenue-producer, based on my stock analysis.
Old icon auto companies like General Motors Company (NYSE/GM) and Ford Motor Company (NYSE/F) sell more cars in a month than Tesla sells in a year, but as my stock analysis indicates, the price appreciation potential with Tesla is far greater, especially if the company can deliver stellar growth.
My stock analysis suggests that Tesla could be the biggest U.S. automaker based on market cap if founder Elon Musk can successfully expand the company’s sales into Europe and China.
Keep an eye on Tesla and look for price weakness to buy. You can also consider playing Tesla via the use of call options.