The year 2021 has already proved to be an exciting one for Tesla Inc. It started with a meteoric rise of the electric carmaker’s stock in the first week of January, reaching an all-time high of $883 per share. The global pandemic has boosted the demand for electric vehicles, and Tesla seems to be the company of choice. Experts predict that this growth may only be the beginning, and Tesla stock may see unprecedented growth in 2021.
In the following article, we will explore the various reasons why experts predict exponential growth for Tesla stock this year.
1. Strong Q4 2020 Earnings
Tesla’s Q4 2020 earnings were impressive, to say the least. The company recorded a record profit of $903 million, beating analysts’ expectations. This was largely due to the increased demand for its electric vehicles in the global market. During the quarter, Tesla delivered 180,570 vehicles, a huge step up from its previous record of 139,300 cars in Q3 2020. The company also announced its expansion into India, where there is a vast untapped market for electric vehicles. These factors have created a lot of optimism among investors, who are buying Tesla’s shares in anticipation of future growth.
2. The Biden Administration’s Support for Electric Vehicles
The new administration seems to be supporting the growth of electric vehicles in the United States. President Biden’s climate change policy plans include a massive investment in clean energy and infrastructure as well as expanding tax incentives for EVs buyers. Many eco-conscious investors are seeing Tesla as the primary beneficiary of the new policy. Furthermore, the administration’s plans to increase spending on research and development on autonomous vehicles may make Tesla’s self-driving technology become mainstream.
3. Increased Production Capacity
Tesla has been increasing its production capacity over the years. In early January, the company announced plans to expand its factories in the US and China. The construction of a new factory in Germany is also underway. This expansion will enable Tesla to increase its production output, meet the growing demand for electric cars, and further its mission of sustainable energy. The company’s new production facilities will enable it to take advantage of economies of scale, where production costs decrease as output increases.
4. Increased Sales in China
China is the world’s largest market for electric vehicles. Tesla has been increasing its market share in China in recent years, thanks to the popularity of its Model 3 vehicles. In 2020, Tesla delivered 499,550 cars globally, and 139,590 of them were in China. The company’s increased sales in China are due to its reduced prices and the popularity of its vehicles among Chinese consumers. Tesla’s Gigafactory in Shanghai is also playing a significant role in the company’s success in the Chinese market. With the expansion of its capacity to manufacture cars in China, Tesla can continue taking advantage of the vast Chinese market.
5. The Potential Expansion into the Battery Business
One of the most exciting prospects of Tesla’s growth in 2021 is the potential expansion into the battery business. The company has been working on a new battery technology that may increase the range and lifespan of its electric vehicles, among other benefits. Tesla’s new technology is also relatively cheaper, which means that it may give Tesla a competitive edge over other companies. The company plans to start producing these batteries in-house, which may reduce its production costs and increase its profit margins. Furthermore, the increasing popularity of electric cars worldwide may create a huge demand for Tesla’s battery technology and increase its revenue streams.
The factors mentioned above are the primary reasons why experts expect unprecedented growth for Tesla’s stock in 2021. Tesla’s strong Q4 2020 earnings, increased production capacity, expanding into new markets, and Biden administration’s support for green energy policies create a favorable environment for further growth. The prospect of Tesla producing new cheaper and more efficient batteries also adds to the positive outlook. With all these factors in mind, it is no surprise that Tesla’s stock prices have been rising steadily, and experts expect the growth to continue. Therefore, Investors in Tesla ought to remain optimistic about the future prospects of the company.
In summary, the exponential growth expected in Tesla’s stock in 2021 is an excellent opportunity for investors to make significant returns. However, as with all investments, due diligence is necessary to understand the risks associated with investing in a fast-growing company. Despite this, the overall outlook seems positive, and Tesla seems poised to take advantage of the increasing demand for electric cars worldwide.