Zachary Okun is a Junior Financial Analyst at I Know First.

Tesla Stock Predictions

Summary:

Elon Musk recently announced a co-chaired venture called Open Al, which will put robots in peoples’ homes.

Unique design of its cars attracts many costumers

Autopilot feature is putting Tesla on top for the race to self-driving cars

There are rumors circulating that Tesla may be opening a production plant in Shanghai, China

May acquire Solar City to help vamp up battery production

Gigafactory is the make or break for Tesla

Launched the most affordable car yet

I Know First algorithm is currently bullish on TSLA in long term

Elon Musk, The Visionary

Tesla is run and founded by the brilliant Elon Musk. He has several other successful ventures, but Tesla is his biggest success because of the recent scare in climate change. Musk is a smart CEO and has been taking the company in the right direction. His new big project for Tesla is to make a more affordable car. He is doing this by building the “Gigafactory” which will drive down the price of their batteries, thus making the car cheaper. Although the company has problems with completing tasks on time, it is imperative to realize how hard this new industry is. Musk is an innovator and is always looking for new challenges. He just recently launched a new venture called Open Al which will hopefully create robots for people to use in their homes. There is a ton of pressure that already exists on him with Tesla, and yet he is still pursuing and launching new ideas. He is a leader in the tech industry, and is carrying Tesla to success.

Why Consumers Should Want a Tesla and What They Don’t Know

Tesla’s car body has a story behind it. The models designed are not just Sedans and SUV’s, but rather works of art with each detail having a purpose. The design of the car is sleek and sexy, that is why it catches so many costumer’s eyes. But what the costumers don’t know is that the design was created to help it reach further distances with its all electric engine. Take for example the door handle, it slides in. It seems like a futuristic feature, but really it helps the car with wind resistance. Secondly, in all Tesla cars, there is trunk space in both rear and front end. All this space exists because the tiny engine is located underneath the car connected to the back wheels. Taking a look into the interior of the car, the most outstanding piece is the massive touch screen by the driver, the dashboard. The dashboard controls all features of the car. Tesla was one of the first companies to control all features of the car via touchscreen, and now most car companies are moving in the same direction. Musk’s created a car that is pristine and clean,that’s why so many consumers want it.

Autopilot Features

Many companies such as Apple, Google, and even a few automakers themselves are in the race to launch a self-driving car. Well, in October of 2015, Tesla launched a new feature in its cars called “Autopilot”. The name is exactly what it sounds like. With one click of a button, the driver can take his or her hands off the steering wheel, feet off the pedals, and let the car takeover. The car has sub-features within the “Autopilot” such as, “Autosteer”, “Lane Change”, and “Autopark”. The only setback with the feature is that it can only be activated while it is on the road. So one can’t get in their car and just expect it to do the rest. Although it is not there yet, it is fairly impressive all the features that it offers and it is giving Tesla a competitive edge over its competitors. It won’t be long until Tesla comes up with the Technology where the driver will have the option to let the car drive from starting to its destination.

Expansion Into China

There is a rumor that Shanghai may be partnering up to run the development of Tesla in China. China is Tesla’s next major target. The country has a lot of orders for cars, but because of the lack of supply Tesla has, those orders aren’t being met. Secondly, a major thing that Tesla offers to its customers is supercharging stations. These stations are spaced out that way costumers can do long driving without worrying that their battery will die. China does not have enough superchargers yet for one to get across country without worrying about this problem. Lastly, a project that will be touched on more lately, is the creation of a second “Gigafactory”. This would help with the speed of manufacturing the car, and bring a lot more supply. It will be very interesting to follow what steps Tesla takes to try and expand into this market.

Possible Solar City Acquisition

Fresh off of the press, Tesla has launched an idea to acquire Solar City for $2.8B. This is one of Musk’s older companies that focuses on producing solar energy. The idea behind the merger is to help speed up the process of building the “cars batteries”, as well as be a more dominant player in the solar field. On top of the new site of Tesla’s “Gigafactory”, there will be solar panels to power it. Musk says it was always an idea to acquire the company, but argues now is the perfect time to merge. The proposed merger has gained scrutiny because Tesla is already in large amounts of debt. Oppenheimer Funds, cut Tesla to “perform” from “outperform” and removed their price target of $385. But at the same time, it is a strong strategy to partner the two to help deploy more solar products, and speed up the process to create batteries. He and his cousin, Lyndon Rive, CEO of Solar City, are both leaving the vote to shareholders. Tesla shares tumbled around 12% after the report, while Solar City shares surged 15%. Long term, this deal can have a lot of implications for Tesla. Most obviously the help of creating its car batteries, but even further building up its electric product campaign (more about this below).

The Game Changing “Gigafactory”

Building even more on the topic of the “Gigafactory”, it is expected that in 2017 Tesla will be unveiling its first “Gigafactory” in Nevada. This has been a massive project that Tesla has taken on, and if all goes well, it will help the company out substantially. A key thing to realize about Tesla is that they are so behind on their orders because of the slow supply of batteries. The “Gigafactory” will surely solve this problem, as well as drive down the price of the battery (the most expensive input of the car). Tesla has also been expanding to energy products such as home and work batteries. Although these products haven’t launched as successfully as their cars, it could be assumed that when more Tesla cars get out on the road people will turn to more of their products.

The Mass Market Car

Building off of one of the purposes for the “Gigafactory”, which was to bring down the price of its most expensive input, batteries. This lead into the recent launch of Tesla’s Model 3. Until now, Tesla has had two all-electric cars called Model S and Model X. The Model S starts at $51,700 while the Model X is offered at $68,100. These two cars are considered luxurious for the features they offer, as well as the price tag. Tesla knows that they want to hit the mass market, and the “Gigafactory will help them do that. It will bring down the cost of the batteries and allow them to sell their newest car, Model 3 at $35,000. This will no doubt open the path to Tesla’s growth by penetrating into the mass market. A more affordable car that is also environmentally friendly is what most people are looking for today. This is evident in the fact that after the weekend the car was unveiled, they already had close to 400,000 reservation orders. It will be really interesting to see when the “Gigafactory” is completed and when they start rolling out their Model 3’s.

Summary

To summarize, Tesla is an amazing company trying to achieve world changing ideas and is run by one of the greatest minds of the tech world. Although the company sometimes does not deliver on its estimates and falls behind on projects, it still has been leading the electric car market backed with a lot of optimism. The two biggest projects that are coming up for Tesla are the completion of the “Gigafactory”, and delivering its Model 3s. On top of this, they are also trying to find ways to penetrate more into the massive Chinese market. These are all tough tasks to accomplish, but that is why Elon Musk is leading the way, and most likely won’t disappoint.

I Know First, comes up with future forecast of how stocks are going to perform for 3 days, 1 month, 3 months, and a year. On the top left is the company ticker. In this case Tesla, (TSLA). In the middle is signal. The signal represents the predicted movement and direction. On the bottom left is predictability. is the historical correlation in an average, given more weight to recent performances. To learn more about the platform please click here.