Something awe-inspiring about Tesla is that it has remarkably exceeded the expectations and predictions of analysts and Wall Street over the past couple of years. With the high demand trajectory being witnessed even now, it is safe to say that the company will continue to beat the predictions.
Tesla sales in Europe and Asia are performing well and exceeding Wall Street by over 15%. There has been a lot of positive news in terms of Tesla’s financials, as the sales and financial results have been in the news.
Tesla has undertaken several developments, such as contracts with Hertz and Uber; therefore, the upward trajectory of Tesla stock is not a surprise.
Does This Make Tesla the Next Game-Changer Stock?
The continuous developments witnessed by Tesla are significant both in the short and long term.
1. Powerball Business
Tesla’s Powerball business has reported doubling in the last year, reporting a high demand that Tesla can merely meet. While most investors may be thinking along the lines of electric cars when it comes to Tesla’s shares, the Powerball business could also be a significant contributor to Tesla shares’ performance.
Worth noting is that the non-automotive part of Tesla is the least underappreciated yet very critical to Tesla’s shares performance. According to analysts, the solar power products and batteries markets are large enough to impact the company’s shares.
The Powerball business is working on innovative products such as the Solarglass Roof that resemble roofing tiles to replace the traditional solar panels that most homeowners are not fond of to drive the sales even higher.
Tesla is also producing large batteries that can store surplus electricity produced by the solar panels instead of feeding it into the electric grid.
Tesla is positioning itself as an electricity generator in several European countries through mass residences. With time, the products will go nationwide in European countries. Thanks to the high demand for energy renewables, the adoption of Tesla’s solar projects will make Tesla shares an attractive option.
2. Tesla and CATL Contract
CATL reportedly signed a new contract with Tesla to supply battery cells. The existing contract, which was to run from July 2020 to July 2022, is set to be replaced with a new one expected to extend to December 2025.
The additional batteries that will be supplied equal 800,000 vehicles. What does the new contract mean for Tesla shares? It is projected that the company will sell over 900,000 autos this year, and the new contract would mean the company is expecting significant growth in sales.
The same is happening in Asia, as the company is also getting into battery supply arrangements in China with LG Chem.
Positive earnings often result in the stock price moving up.
3. Tesla and BYD Auto
According to reports, Tesla may also have entered into another battery supply agreement with BYD Auto. It is safe to say that the two companies are currently the largest BEV manufacturers globally. BYD has successfully been able to achieve vertical integration and enjoyed its benefits.
Tesla is currently trying to catch up with BYD in this light. Tesla understands that moving into battery manufacturing and ensuring vertical integration will see the success of this part of the business by shortening the product development lifecycle and lowering overall costs.
Tesla is also reported to have entered into a contract to purchase BYD’s Blade LFP battery, very likely to be used for Tesla autos manufactured in Shanghai. The purchase could also be made for the anticipated new $25,000 car the company is working on in Shanghai.
It is essential to mention that the factory in Shanghai is growing at a tremendous rate and already investing in research and development and battery manufacture. The growth witnessed and projected is expected to drive Tesla stock prices up.
4. New Megapack Factory
In 2021, Tesla announced a new facility, Megafactory, in Lathrop, California, which will produce megapacks, Tesla’s largest batteries for stationary energy storage. The game-changing facility will expand the company’s production. It is projected that the investment in energy storage will make up 50% of its revenue.
This is also set to be a game-changer for Tesla stocks. The Megapack business is expected to charge the already high CAGR rate. It is with no doubt that Tesla’s venture into the storage batteries space will have a significant and positive impact on the company’s bottom line and, consequently, stocks.
Conclusion
Tesla is continuously making new developments, ranging from signing contracts with battery manufacturers, expanding the company’s battery manufacturing facilities, and increasing battery supply to meet the growing demand for the company’s products.
The growth in the auto and energy divisions will see a boost in the company’s revenue and see a spike in the stock prices. Due to the ongoing and upcoming developments, it should not be a surprise that Tesla will become the next game changer stock.
