Tesla's Electric Surge: Stock Climbs 56% in 2023 Amid New Innovations and Legal Hurdles
2min read Tesla's (TSLA) stock has shown remarkable performance recently, with a 5.34% rise last week, marking a continuous three-day gain of 10.76%. Over the last week, it has increased by 12.77%, and since the start of the year, Tesla's stock has seen a substantial rise of 56.64%, bringing its market capitalization to approximately $1.25 trillion.
A recent visit to Tesla's Giga Austin by a prominent analyst from a leading bank resulted in an upward revision of Tesla's target price to $400, maintaining a "buy" rating. Impressed by Tesla's core electric vehicle business and the Future of Optimus and autonomous taxi service, the analyst sees significant growth potential beyond 2025. Tesla's forthcoming low-cost electric vehicle, expected to launch in the first half of 2025 and priced below $30,000, could be a crucial growth catalyst. This vehicle aims to expand Tesla's total addressable market through cost-reduction techniques.
Tesla's FSD (Full Self-Driving) software trials have garnered positive feedback, particularly in complex driving conditions with minimal human intervention. The test phase is likely to expand, with broader experiments planned for next year. CEO Elon Musk has ambitious production goals for the Cybercab, targeting two million units annually by 2026 to meet market demand. This venture could enhance Tesla's margins by focusing on software-driven products.
The Optimus humanoid robot is another intriguing prospect for Tesla. Currently aiding in tasks like battery sorting and conducting flexibility tests, such as catching tennis balls, Optimus could see expanded deployment at Giga Austin by the end of 2025. Despite Musk's vision of Optimus being Tesla's most significant product with a massive potential market, analysts view it as a long-term opportunity, anticipating performance improvements and cost reductions by 2026.
However, Tesla faces challenges due to a recent ruling from the Delaware Court of Chancery regarding Musk's compensation plan. This ruling, which nullified the plan and awarded legal fees to the plaintiff, could complicate Tesla's operations if an appeal to the Supreme Court becomes necessary. The compensation issue dates back to 2018 when Tesla's board granted Musk stock options contingent upon achieving specific performance goals. While shareholders largely supported the compensation plan, the court's ruling creates uncertainty, though Tesla remains committed to resolving the matter favorably.
Despite these legal challenges, Tesla's operations in China show mixed results. November's delivery numbers from Tesla's Shanghai plant saw a month-over-month increase but a year-over-year decrease. The Chinese market remains crucial for Tesla's global sales strategy, with ambitious plans to achieve record-breaking delivery numbers by the end of 2024.
Looking ahead, Tesla plans to introduce a new entry-level model, the "ModelQ," in the first half of next year. Affordable pricing after subsidies and leveraging advancements in battery technology are expected to position ModelQ as a competitive offering in the North American market.