Tesla, founded in 2003, has become a major player in cars and tech, known for pushing boundaries with electric vehicles and new technology. After the recent election, Tesla’s stock jumped as investors bet on policies that could favor the company, like easier rules for autonomous driving and possible changes to subsidies. I think Tesla is a very good long-term investment for these next four years, as it’s well-positioned to take advantage of these shifts, making it a top pick in the market.
Figure 1.0 Tesla Stock Past 5 Days
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In the past 5 days since the recent election, Tesla’s stock shot up by around 30.68%, jumping from $251 to $328. This big rise came as investors got hopeful about possible new policies that could help Tesla, like support for autonomous driving. Now, the stock is on a bit of a slow decline, but it's expected to stabilize and likely climb again as things settle.
The UN has set ambitious goals to reduce global emissions and shift toward cleaner energy sources in the near future. With targets like cutting emissions in half by 2030 and reaching net-zero by 2050, the push for cleaner energy is stronger than ever. This is great news for Tesla investors, as the company is positioned to benefit from this shift. As more countries look to adopt electric vehicles and sustainable technologies to meet these goals, Tesla’s focus on EVs and energy solutions could lead to significant growth opportunities.
Tesla is no longer the only big name in the electric vehicle market. Other big car manufacturers like Ford, General Motors, Volkswagen, and Toyota are all launching EVs, trying to compete directly with Tesla. This new competition could impact Tesla’s market share, as these companies have been well-established brands for quite some time. As more options become available to consumers, the demand for Tesla's vehicles may see a decrease, and Tesla may face pressure to adjust pricing or increase spending on marketing and new features.
Figure 2.0 Electric Vehicle Market Share by Brand
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You will notice Tesla is still the biggest EV seller in the market, but other car manufacturers are starting to join in and take some of their market share.
Another risk is Elon Musk’s presence on social media. In May 2020, Musk tweeted, “Tesla stock price is too high,” and the stock dropped 10% that day. This shows how his unexpected tweets can cause Tesla’s stock to swing, sometimes for reasons unrelated to the company’s actual performance.
Taking into account Tesla’s growth opportunities, recent election impacts, and the risks involved, Tesla stands out as a solid long-term investment. The company is well-positioned to benefit from potential policy changes, the global shift toward clean energy, and its strong position in the EV market. While it faces increased competition and occasional market swings from Musk’s social media activity, Tesla’s innovative edge and expanding role in both tech and automotive make it a smart choice for investors focused on the future.
Glossary
Market Share – The percentage of total sales in an industry generated by a particular company or brand.
Volatility – The degree of variation in a stock’s price, which can lead to rapid increases or decreases in its value.
Net-Zero – A goal for balancing the amount of greenhouse gases emitted with the amount removed, often by reducing emissions to nearly zero by a set year.
Published by: Rickus de Villiers