We all dream of the stock chart that swiftly travels up and to the right after our investment in a company. Prior to last night, that is exactly what the Tesla Inc (NASDAQ: TSLA) share price delivered for 13 consecutive days of trade.
The sensational rally resulted in shareholders of the electric vehicle company enjoying a 40% gain in the space of a fortnight, as shown below. However, the green streak came to an end overnight, with enthusiasm momentarily depleted, allowing shares to settle 0.7% lower at US$256.79 apiece.
The rapid ascension has no doubt left some onlookers wondering what could be behind such an energised reception. So, let’s pause for thought and reflect on the recent driving force behind the Tesla share price and where to next.
Why has this EV maker been charging upwards?
Firstly, there could be a whole host of reasons — both at a macro and company level — that have propelled Tesla shares higher. However, the most pertinent developments of late likely relate to its EV charging network.
In the past two weeks, both Ford Motor Co (NYSE: F) and General Motors Co (NYSE: GM) have announced that they will adopt Tesla’s North American Charging Standard (NACS) across Canada and the United States moving forward.
Essentially, the hope is it will remove a barrier for would-be Ford and GM buyers that might have been concerned over a limited number of charging stations. As part of the agreement, a network of more than 12,000 Tesla Superchargers will become available to GM and Ford EV owners.
At the time of writing, Stelanntis — another automotive company — is rumoured to be ‘evaluating’ the adoption of NACS as well.
What could be next for the Tesla share price?
Looking ahead, the question on everyone’s mind is where to next for the Tesla share price. In the view of KGI Securities analyst Jennifer Liang, the next 12 months could see the EV company reach US$335 per share.
Updating her target price last week, Liang cited Tesla’s investments in manufacturing and battery technology as positive forward drivers. Additionally, the analyst believes the Inflation Reduction Act will provide a boost to sales while also collecting billions in credits for battery production.
In contrast, recent research published by Morgan Stanley’s Adam Jonas reads less bullish. Jonas wrote:
Tesla is in the midst of an industry-wide EV price competition with potentially falling margins and EV market deceleration (still growth — but at a slower rate). If the company wasn’t benefitting from significant government incentives (IRA) and price cuts (30% on Model Y YTD), we question how much cash flow Tesla’s would be generating.
Following on, Jonas still thinks Tesla is underappreciated by the market in some regards. As such, Mogan Stanley holds a $200 price target on the company but with an overweight rating.
The Tesla share price is up 137.5% so far this year — exceeding the 31.2% YTD return notched up by the Nasdaq Composite Index (NASDAQ: .IXIC).
