Tesla Stock May Be Approaching Important Milestone

After Tesla shares fell significantly in 2022, the company came into this year with fresh price cuts to boost demand and impressive first-quarter sales, both preceding a gradual rise in the stock’s price. In the last month or so, however, Tesla share prices increases have been anything but gradual, rising around 45 percent on news of charging hardware partnerships.

Above: A Tesla logo (Image: Casey Murphy / EVANNEX).

Now, according to The Street, Tesla stock appears to be taking aim at a significant milestone, joining companies such as Alphabet, Amazon, Microsoft and Saudi Aramco in a rare market position. At the time of writing during after-hours trading on Tuesday, Tesla’s market capitalization sits at $825.78 billion as share prices increased 1.15 percent to hit $277.61 (+$3.16) — causing some to wonder if the company may once again reach a $1 trillion market cap.

To be sure, Tesla’s shares have risen in recent months on a few different pieces of news. For one, the Model Y SUV became the best-selling car on the U.S. market in the first quarter, which CEO Elon Musk predicted last year would happen in 2023. The SUV even outsold top sellers like the Toyota Corolla, and the Model Y’s price dipped below the average sticker price for new car sales.

JATO Dynamics data says that the Tesla Model Y sold 267,000 units in Q1, marking a 69 percent jump from the same quarter last year. Comparatively, the Corolla had 256,400 sales in the first quarter, representing measurably fewer units than in 2022. Federal and state tax incentives of up to $7,500 could continue to hold steady demand for the Model Y, so The Street predicts these trends to continue.

More recently, other automakers have announced plans to build electric vehicles with Tesla’s North American Charging Standard (NACS) plug, giving them access to the company’s vast Supercharger network. Major automakers beginning with Ford and General Motors have begun announcing plans to adopt the hardware, with the latest company to join being startup EV manufacturer Rivian.

Piper Sandler analysts predict that Tesla’s Supercharger partnerships could add as much as $3 billion per year in revenue, or even more if automakers such as Toyota and Hyundai join. Reports say that Hyundai has already been considering a shift to the NACS plug, so it’s not out of the realm of possibility.

In 2023 alone, Tesla shares have risen 122 percent, and they would only need to rise roughly 15 percent more to surpass a trillion-dollar valuation. In any case, shareholders will look forward to hearing updated delivery and profit margin details during Tesla’s Q2 earnings report, which is expected to occur in mid-July.

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