Breakout Watch: Tesla Stock Set To Plug Into New Buy Zone

Tesla (TSLA), a pioneer in electric vehicles, continues to transform from a maker of cool cars into settling the industry and expanding infrastructure. Ford Motor's (F) new partnership with Tesla, which allows them to connect into the network of superchargers that Tesla has built up, is driving Tesla stock towards a new buying point.

The agreement between Tesla and Ford shows how the competition for the best EVs is now beyond General Motors, Toyota Motors (TM), Rivian (RIVN), Li Auto (LI), Lucid Automotive (LCID), Rivian (RIVN) as well as General Motors.

ChargePoint (CHPT), a company that reported earnings on Thursday, is one of the new competitors who are able to take advantage of this infrastructure.

Supercharging Expansion

According to the Wall Street Journal, Tesla will allow Ford EV owners access to its network of more than 12,000 Superchargers. This move sparks a debate about establishing EV charging standards.

Consumer Reports reported in March that Tesla had developed a special adapter called the "Magic Dock" to allow non-Tesla electric vehicles to use Superchargers. The publication also stated that, "to be eligible for a share of the $7.5 million earmarked to expand the EV charging networks in the Bipartisan infrastructure law, [Tesla] has said it will open 7,500 chargers on its Superchargers and Destination Chargers network to non Tesla vehicles by the end 2024."

Owners of the Ford Mustang Mach-E and F-150 Lightning, as well as the E-Transit vehicles, will be able to access the Superchargers early next year, thanks to an agreement with Ford.

Tesla Vs. Other EV Players

Below is a table that compares Tesla to a group of select players in the electric vehicle space. The table below shows how Tesla compares to other players in the EV space.

Li Auto, a Chinese electric vehicle manufacturer, is rated the highest with 98 Composite Rating. Ford stock and Tesla stock are ranked second and third, with respective ratings of 81 and 75.

Elon Musk, Tesla's CEO, reportedly told China's Foreign Minister that Tesla was willing to expand its business in China while visiting China this week. Musk's visit, his first since early 2020, comes at a time when EV competition has exploded in China. However Tesla hasn't provided any updates regarding plans to increase production at its Shanghai facility.

Electrek reported that Tesla is liquidating its Model 3 in preparation for a new launch. Tesla is quietly increasing U.S. electric vehicle discounts.

Lucid LCID 21-760 -30-36 19 1514 D
Nio NIO 12 -165 -258 3 71 1 10 D

Tesla's electrifying market cap

The company's earnings have been inconsistent, much like the stock volatility. The EV pioneer has seen an average annual growth in EPS of 146% for the last three year, but quarterly growth is erratic.

The Q1 earnings fell 21%, to 85 cents per share. Wall Street predicts a slowdown of 18% for the year but a rebound to a rise of 44% to $4.82 per share in 2024.

In recent quarters, sales growth has slowed but remained steady. In Q1, revenue increased by 24% year-over-year to $23.3 billion.

IBD Stock Checkup gives Tesla a B SMR rating, which measures sales growth, margins, and return on equity. Tesla also boasts an impressive debt-to equity ratio of only 4%.

Tesla's market cap is $655 billion. This dwarfs Ford ($48 billion), and GM ($46billion). Toyota's market capitalization is $229 billion. This is about one third of Tesla. Li, with just under $29 Billion, is the leader of all other EV companies.

Tesla Stock Recharges After Hitting Sharp Speed Bump

Tesla's stock plunged sharply after hitting its all-time peak in November 2021. It finally halted in January this year. The EV giant flashed for six weeks straight in high volume, before hitting resistance.

Tesla's stock fell below its 10-week average moving line in March before it reclaimed the benchmark while forming its present base.

Tesla's stock is racing towards a 207.89 buying point as its relative strength line starts to rise again. The 21-day exponential moving line has now risen above the 50-day long-term line, indicating a technical rebound. The recent above-average volume indicates demand for Tesla stocks.

The EV giant slipped Thursday morning, but then gained traction. Tesla has just missed the buy-point after a 1.5% increase in volume above average.

Watch for Tesla to continue to lead the EV revolution and to sell at least 40% more than average.