Looking at the performance of Tesla (NASDAQ 🙂 stocks, it's no secret that investors don't see a major competitive threat to the electric vehicle company any time soon. Even after taking into account the recent weakness that marred fast-growing tech companies this year, Tesla is still one of the top-performing companies to rank for the past 12 months.
Tesla investors are delighted to see the world's most valuable EV company on track to meet its production goals. The company told investors early this month that it had delivered 184,800 cars worldwide in the first three months of 2021, up from 180,570 in the fourth quarter.
"We are encouraged by the strong reception of Model Y in China and are making rapid progress with full production capacity," the company said. The new Model S and Model X have also been "exceptionally well received," Tesla said, adding that it is still in the early stages of production.
As the California-based company continues its growth trajectory, some serious competitors are also entering the market. While traditional automakers like Volkswagen (OTC 🙂 and General Motors (NYSE 🙂 are accelerating their EV efforts, smaller Chinese upstarts like Nio (NYSE 🙂 and Xpeng (NYSE 🙂 are also vying for tech-savvy customers.
VW launched its new Audi Q4 e-tron model this week to compete with Tesla in the fast-growing compact crossover SUV market. Prices for the vehicle start at 41,900 Euros ($ 50,200) in Germany, offering a battery range of a whopping 520 kilometers (323 miles).
Audi's EV model is one of twelve vehicles planned by the German automaker, including VW's ID.4 and an electric version of the Porsche Macan. VW aims to sell approximately 600,000 purely battery-powered cars this year. The Q4 e-tron is based on VW's mass-market electric car architecture called MEB, which car analysts say performs well against Tesla in a number of key areas.
Price target of $ 150
Volkswagen should receive increasing credit for its battery-powered car strategy, which could lead the company to sell Tesla electric vehicles to surpass next year. note from Deutsche Bank.
If the market were to apply multiples such as Tesla and Nio to VW's battery-electric car business, it would be worth about $ 195 billion, more than the entire company is now worth, analysts led by Tim wrote. Rokossa in a report. last month. They increased their target price for VW shares by 46% to 270 euros.
As competition intensifies, some analysts have questioned the highly optimistic assessment of Tesla's stock. The company's valuation of about $ 700 billion is close to the aggregate size of the US and European auto market, even though it is only a “small player overall,” said Roth Capital analysts Craig Irwin, who thinks Tesla- shares are worth $ 150.
Tesla Weekly Chart.
Irwin told CNBC this month:
“So to me I see this as a disruption of the market. I see this as something that avoids analysis of the basics and I think there is room for many successful companies in the market. People just assume Tesla has no competition when they give this kind of lofty valuation to the company. "
Bottom Line
Despite competitive threats, Tesla remains the most favored EV stock, with analyst consensus target of approximately $ 700 per share. That means investors are comfortable with the company's performance and future prospects. That said, it will certainly become more difficult for analysts to justify a further rise in Tesla stock if new entrants manage to attract buyers and challenge the company's dominance. That may be why the Tesla stock has underperformed the general market this year, following notable gains in 2020.
