Breakout Watch: Tesla evolves from electric vehicle pioneer to charging colonizer

With electric vehicles now common, You’re here (TSLA) continues to evolve from an electric vehicle pioneer making cool cars to a settler expanding infrastructure to help the industry keep moving forward. A new partnership that allows Ford engine (F) to connect to Tesla’s supercharger network, Tesla’s stock is moving to a new buying point.


The Tesla-Ford deal only further underscores how the competitive landscape for the best electric vehicles has outgrown the likes of Li-Auto (LI), Lucid (LCID), Rivian Automotive (RIVN), as well as General Engines (GM), Toyota engine (TM) and other major automakers.

Building the infrastructure to charge all of these electric vehicles brings in new competitors, such as Charging point (CHPT), which reports results after Thursday’s close.

Boost Extension

As The Wall Street Journal reported, Tesla will give Ford EV drivers access to Tesla’s network of more than 12,000 Superchargers. This decision sparks a debate on the establishment of a charging standard for electric vehicles.

In March, Consumer Reports noted that to allow non-Tesla electric vehicles to use Superchargers, Tesla has developed an adapter known as the “Magic Dock.” The publication added that “to qualify for a slice of the $7.5 billion earmarked for expanding the electric vehicle charging network in the bipartisan Infrastructure Act, [Tesla] says it will open 7,500 chargers from its Supercharger and Destination Charger network to non-Tesla vehicles by the end of 2024.”

Under the agreement with Ford, owners of the Ford Mustang Mach-E, F-150 Lightning and E-Transit vehicle will have access to Superchargers starting early next year.

Tesla vs. These other EV players

The chart below shows how Tesla compares to a select group of other players in the EV space. (Car manufacturers such as volkswagen (VWAGY) and Mercedes-Benz[ticker symb=MBGAF]that do not have a composite rating, were excluded.)

Chinese electric vehicle maker Li Auto takes pole position with a composite rating of 98. Ford and Tesla stocks come next, with 81 and 75 ratings, respectively.

Visiting China this week, Tesla CEO Elon Musk reportedly told the country’s foreign minister that Tesla wanted to expand its business in China. The visit – Musk’s first since the start of 2020 – comes as competition from electric vehicles in China has soared, but Tesla did not provide an update on plans to increase production at its Shanghai factory.

Meanwhile, Electrek reported that Tesla appears to be winding down the Model 3 ahead of a refresh launch. It comes as Tesla quietly increases rebates on electric vehicles in the United States.

Business Symbol Comp Rtg EPS % Chg last quarter EPS is current quarter % EPS East Court year % estimated EPS next year % Rt EPS Rt RS Reg SMR
Li-Auto LI 98 186 282 367 131 84 90 VS
Ford engine F 79 66 -32 -5 -2 79 43 B
You’re here TSLA 78 -21 2 -18 44 93 43 B
General Motors GM 68 6 46 -11 -7 76 28 B
Toyota engine MT 53 -4 -3 17 9 48 43 VS
Fisker FSR 27 7 24 56 64 26 20 D
Rivian Automotive SHORE 22 13 13 16 37 25 11 D
Lucid LCID 21 -760 -30 -36 19 15 14 D
Nio NIO 12 -165 -258 3 71 1 ten D

Tesla’s Electrifying Market Cap

Like the choppy volatility of Tesla shares, the company’s earnings performance has been sporadic. While the electric vehicle pioneer has posted an average annual EPS growth of 146% over the past three years, quarterly growth has been bumpy.

First-quarter earnings slowed 21% to 85 cents per share on an annual basis. Wall Street forecasts an 18% slowdown for the year, but a rebound to a 44% rise to $4.82 per share in 2024.

Sales growth has been more stable, but has also slowed in recent quarters. In the first quarter, year-over-year revenue rose 24% to $23.3 billion.

In IBD Stock Checkup, Tesla earns a B SMR rating, which tracks sales growth, profit margins and return on equity. The company also has a low debt ratio of 4%.

Tesla’s stock market capitalization is $658 billion, eclipsing Ford ($48 billion) and GM ($46 billion). At $229 billion, Toyota has about a third of Tesla’s market capitalization. Li leads the other electric vehicle companies on this list with just under $29 billion.

Tesla’s stock recharges after hitting a sharp speed bump

After hitting an all-time high in November 2021, Tesla stock fell sharply until it hit the brakes in January this year. The EV giant recharged and flashed six weeks straight in good volume before hitting resistance.

After pulling back below its 10-week moving average in March, Tesla fell below that benchmark before recovering while forming its current base.

As its relative strength line recovers again, Tesla stock is now heading towards a buy point of 207.89. In a sign of a rebound in technical strength, the 21-day exponential moving average has risen above the longer-term 50-day line. Above-average volume in recent days indicates demand for Tesla shares.

The electric vehicle giant slipped early Thursday, then found traction. Closing just under 2% higher in above average volume, Tesla ended the day at 207.52.

As Tesla continues to drive the electric vehicle and charging revolution, look for the stock to cross the volume buying point at least 40% above average.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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