Monday saw the share price of Tesla rising by 3% after analysts increased their price targets for the electric car manufacturer. It follows on from a 13.5% share price rise last week that was triggered by the positive news that Tesla had delivered a record number of electric vehicles. All of which suggests that while 2021 was a good year for Tesla, 2022 could be even better.
January started well with the promising news that Tesla had shipped over 70,000 of its electric vehicles in China. This marked the highest monthly rate since the brand started its operations in Shanghai just a couple of years ago. The Shanghai factory now accounts for nearly half of all production and deliveries from Tesla and industry estimates suggest that China could account for over 40% of Tesla’s deliveries this year.
The positive news was enough for analysts at banks such as Morgan Stanley and Goldman Sachs to increase their price forecasts for Tesla from $1,125 to $1,200. It came at a useful time as the previous four days had seen the price of Tesla stock dip from $1,200 to $980. As such, the market reacted strongly and helped to push Tesla stock up at a time when many tech brands are struggling against the harsh economic backdrop of inflation and the threat of looming interest rate rises.
Reasons to be confident about Tesla stock
While many tech stocks suffered from a relatively flat end of year, Tesla managed to deliver better than expected fourth quarterly delivery figures. This is boosted by the fact that Tesla is shortly to begin production in the new Gigafactory location in Austin, Texas. The new factory will join other bases of production already in operation in Fremont, California and Berlin. All of which should have the power to boost operational margins and invest more into production.
It comes at a time when the shift towards electric vehicles is having a noticeable effect on the markets. With an estimated $5 trillion up for grabs in terms of the EV market, it’s a race between the newer brands like Tesla and Rivian and the established auto manufacturers such as Volkswagen and General Motors.
Tesla has made an impressive start and recently became a trillion dollar company in less than two decades. However, it has previously shown difficulties in how to supply the skyrocketing demand for its electric vehicles. Thankfully recent moves such as rewriting its software have helped Tesla sidestep some of the supply chain issues that have dogged other tech brands.
As such, the electric car manufacturer is planning to deliver two million vehicles in 2022 which is an increase of over 50% compared to last year. All of which is consolidating Tesla’s position as the market leader in the EV market and puts it in a commanding position to maintain its impressive form throughout the remainder of the year.