Tesla, Inc. [NASDAQ: TSLA] is down by over 30% this year. This followed fears that demand for Tesla cars was not growing fast enough. However, in the latest investor conference, the company has moved to ease investors’ minds. The company’s CEO Elon Musk told investors that Tesla expects to deliver between 90k and 100k vehicles in Q2 of 2019. This is a huge jump from Q1 numbers, when demand did not meet investor expectations. In Q1, Tesla only delivered 63k cars.
Elon Musk also hinted at something much bigger. He stated that the company could get into mining. The goal would be to take control of battery production supply chain. This would significantly ease the challenge of scalability in battery production, as demand for Tesla cars continues to grow. Besides solving the problem of costs, this would perhaps significantly lower Tesla’s costs of operation long term. The company can then pass on these benefits to its consumers, and spur demand.
The CEO also touched on the company’s move to mass produce the Model Y. To achieve this end, Tesla is looking to open a factory in every continent. Mass producing the model Y SUV could play a huge role in pushing up sales, and help grow the Tesla brand in the long run.
These affirmations by Elon Musk seem to have put investors’ minds at ease. Tesla closed Tuesday’s trading up by 1.98%. It also seems to be gaining bullish momentum in pre-market trading, and is up 2% at the time of writing.
From a look at the charts, bullish sentiment seems to be taking over on the 1-day chart. On this chart, Tesla is on the rise after a correction that took it to $213.64. It’s a positive indicator that the reassurances from Elon Musk have a positive impact on the market. This increased bullish sentiment also reflects on the monthly charts, where it is on an uptrend, with a possible resistance at $236.86 on the 50-day MA.
Over and above these short-term price movements, some analysts believe that Tesla’s self-driving technology is heavily undervalued. According to Morgan Stanley, Tesla’s autonomous driving technology is heavily underestimated. This is a pointer to Tesla’s potential for growth in the long run, as this technology becomes more accepted in the auto industry. Morgan Stanley has also maintained its outlook for Tesla at equal weight, in line with their views on this company’s self-driving technology.
Besides Morgan Stanley, the overall consensus among analysts for Morgan Stanley is 3, which means it’s a hold. Other analysts such as Wedbush have also maintained their outlook for Tesla. Wedbush maintains that Tesla will outperform. Nonetheless, Tesla has its risk, just like every stock out there. For instance, it under-performed in sales in Q1, and there are no guarantees that it will meet its targets in Q2. Those are factors that are fully controlled by the market. There are also risks that autonomous driving is still far off from going mainstream.