Tesla Battery Day turned out to be a disappointment and the stock has fallen by double digits since. What’s the next catalyst for TSLA?
The hype surrounding the Tesla Battery Day event did not live up to expectations. There was no million-mile battery as had been speculated. Additionally, the advancements in battery technology are still years away from being realized.
In short, there was no immediate boost to Tesla’s share price.
After hitting a two-week-high of nearly $450, Tesla’s stock is now down by around 15%.
With Battery Day probably being Tesla’s most anticipated event this year, one would be forgiven for assuming that the most significant catalyst for TSLA has been exhausted. That is not the case, though.
In addition to the delivery numbers expected to be published early next month, Tesla will release Q3 results in late October.
Additionally, Democratic policies in general and the November election are the other possible catalysts for the stock.
According to senior CFRA analyst Garrett Nelson, investors in Tesla and other electric-vehicle (EV) makers would benefit more from a Joe Biden victory in November.
Biden has promised several policies that would benefit EV makers, including those that incentivize the purchase of such vehicles. Biden has promised to prioritize the expansion of the infrastructure needed for increased EV uptake, too.
Currently, the number of EV charging stations in the U.S. is around 27,000. The Democratic presidential candidate intends to increase that by nearly 20 times to about 500,000. This would significantly reduce the range anxiety that prevents many would-be buyers from purchasing an EV.
Additionally, Biden has proposed to upgrade the federal government’s fleet of internal combustion engine (ICE) vehicles to EVs. Tesla would no doubt be among the biggest beneficiaries of such a program.
Biden has additionally announced other traditional incentives to stimulate EV demand, such as subsidies and rebates.
California Governor Gavin Newsom on Wednesday signed an executive order requiring all new vehicles sold in the state to be emissions-free in 15 years.
This could have a ripple effect that would affect Tesla’s fortunes in two ways. Other blue states could follow California’s lead, for instance, thereby increasing the total addressable market for EV makers.
Additionally, California is the world’s fifth-largest car market. With its market size, California would force automakers to invest more in EV production and marketing. As production numbers grow, new economies of scale would lower costs, thereby bringing EV prices closer to par with ICE vehicles.
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