Why Tesla Stock is on the Rise
Tesla certainly gets a lot of media coverage, from the antics of its founder and CEO Elon Musk to its groundbreaking technology. But press attention does not always translate into value.
In fact, Tesla stock predictions have been on a roller coaster ride for months. In May, the stock was reported to be down 35% since the beginning of 2019. And yet, during the first week in June, its shares rallied!
Tesla stock predictions are still notoriously uncertain, but here are a few reasons why the electric car maker may be on its way up.
1. Increased Delivery of Product to America
Analysts think Tesla jumped this week after it delivered 33,000 vehicles in North America, The company is offering performance bonuses to salespeople to move the product
The company is also expected to ship 33,000 more cars by the end of the summer, indicating an optimism that the market likes.
2. Wave of the Future
There’s no doubt about it that Tesla is a harbinger of the future. More and more consumers are worried about climate change and want cars that aren’t dependent on fossil fuels. (We also want self-driving vehicles!)
Whether Tesla’s technology and manufacturing processes can keep up with their prescient ideas is another question.
Most investors see promise in green products and innovations going forward, so many hope that Tesla may weather its storms eventually towards smooth sailing ahead.
3. Strong Brand
Tesla’s strong brand drives consumer recognition and desire. No matter how nutty Mr. Musk behaves, he is a multimillionaire. His product is beautifully designed and associated with luxury, speed, and the environment.
That brand recognition may go a long way in supporting the high price tag, especially as more competitors come on the market here and abroad. Never underestimate the power of a big name.
By leveraging this brand, Tesla may be able to save money- and debt is one of its biggest drawbacks right now. Musk has thousands of Twitter followers that heed his call, and the company spends a fraction of the advertising budget spent annually by the big auto manufacturers.
4. Rising Demand Overseas
Increased shipments in the United States are not the only indications that demand is rising globally for Tesla. Electric vehicle sales in China are hot due to government mandates, and a new Tesla factory near Shanghai is expected to begin production in August.
Tesla’s popularity in the China market is a sure sign of potential. Chinese internet giant Tencent Holdings already owns 5% of the company. And manufacturing Teslas in China may be a savvy way around the tariffs being imposed by the current U.S. administration.
Tesla Stock Predictions: Get Ready for a Wild Ride
If you are an investor who likes to take a chance, you may want to take a look at this company. Even if the stock price fluctuates, you can still derive value from holding it while the company grows if you take advantage of such tactics as stock loans. Tesla stock predictions may be shaky, but there may be long term benefits.
Tesla may be a stock you want to buy now and hold on to. But holding a stock does not mean you have foregone liquidity. If you have questions about how to borrow against your stocks for further investing, contact us.