Is Tesla down for the count?

27 April 2020 (Last Updated April 28th, 2020 17:00)

Who hasn't heard of Tesla? We all know it's a company that makes electric cars. But when trading stocks, it's always helpful to get to know the company you're trading more deeply. It's important to look at what the company does, how it started, and what it plans for the future.

Sponsored by EverFX Sponsored by Visit Company

Who hasn’t heard of Tesla? We all know it’s a company that makes electric cars. But when trading stocks, it’s always helpful to get to know the company you’re trading more deeply. It’s important to look at what the company does, how it started, and what it plans for the future.

Tesla, Inc. – named after electrical engineer Nikola Tesla, was founded in 2003 under the name Tesla Motors, Inc, with famous billionaire Elon Musk as chairman of the board. Musk also contributed the lion’s share of the initial funding (98%).

Tesla’s flagship products are the electric vehicles it’s famous for, but it also produces green energy initiatives, such as solar roof tiles. Based in Palo Alto, California, and currently run by Elon Musk. Tesla operates several plants across America (Nevada, California, and New York) as well as in China.

Tesla has never had a profitable year, but it has had several profitable quarters – the most recent one in December 2019 – despite the projections of losses made by prominent analysts.

The company has chosen a strategy that starts with low volume high priced luxury vehicles and gradually evolves into high volume vehicles at a lower price. This strategy follows a familiar technological product life cycle: targeting the wealthier users at first and then invading broader markets with a price drop.

Tesla recently took a bold step and released its patents to be used by the public in good faith. While vehicles are on display in stores and galleries, which are effectively showrooms, the purchase is only available on the company website. This unique method of selling cars has resulted in a dispute with US car dealerships, as every other vehicle manufacturer sells cars via dealerships. Following this dispute, Tesla announced in 2019 that the stores and galleries would shut down, and Teslas will only be available for purchase via the website. Tesla reversed this decision in 2019 and announced it would only shut down approximately half of the store and galleries it initially intended to.

In addition to this, Tesla is planning to release a new Roadster model this year, and later in the future, it plans on releasing two truck models: the Tesla Semi and the cybertruck. The cybertruck already has over 250,000 pre-orders, hinting at massive growth coming up.

According to Musk, his vision of the company is one where the company produces electric cars with a price tag that most people can afford. In 2019 Tesla sold 367,849 units, which is 50% higher than in 2018, but this vision still has a way to go.

Tesla stock status

The day before writing this article, Tesla was down by about 16%, and the day it was written, stock rose by more than 4%.  The most critical issue that is significantly influencing Tesla stock these days is not the same thing influencing the entire market: the Coronavirus. As the company runs factories in the US and not just in China, manufacturing is not an issue, and so COVID-19 doesn’t have a significant influence on this company. It is the oil price war, and that reduction in oil prices means a reduced interest in electric cars. The way this would influence the long-term future of Tesla remains to be seen. Predictions say environmental movements and the incredible technology incorporated into the vehicles should suffice to offset lower oil prices.

As for the short term future of Tesla stock, based on the technical analysis of the day this article is being written, it looks like the downtrend will continue for a little longer. Whether it will break out or break down all depends on the market as a whole and would be anyone’s guess.

It’s not as bad as it sounds

Since mid-February, Tesla slid down about 31%, and yes, we mentioned no one knows what the future brings. But even with that slide, Tesla is still 180% higher than six months ago. Tesla is a growth stock, and while no one really knows what the future brings, the concern has no likely reasons unless COVID-19 brings about some unforeseen changes. Or if a new electricity-allergy epidemic spreads through the planet.

If you own a slice of Tesla, you’re probably not selling your share and riding out the storm. The financial experts at EverFX say that’s probably the wisest thing you can do. If you don’t own a slice of Tesla, you might consider this an excellent time to look into purchasing some.

A little help for Tesla

There’s no question about how great the product is. Not only is it environmentally friendly, which is so essential these days, but it’s also brimming with fancy techy gadget-style tech, that it seems counterintuitive these products aren’t fetching a much higher stock price.  So we wanted to make sure you know about Tesla’s Easter eggs. Several of their products have hidden pop culture references, which is something no other car manufacturer can say.

Back to the future

Available on model S, Model X, and model 3

To launch the Easter egg, tap the battery icon in the Tesla phone app when the car is precisely 121 km out of range. Not sure when you would ever find yourself 121 km away from your vehicle, but that’s the Easter egg. First, a message will pop up on your screen, saying, “Time circuits off,” and “be sure to reset your clock to account for temporal displacement.” The vehicle title on your phone will change to “OUTATIME.” The notification for “Charging scheduled” will change to “Time circuits on.” We could continue describing the app’s reaction, but it seems clear enough. The vehicle itself – of course – remains intact.

Monty Python

Available on model S, Model X, and model 3

In the app, you can see the name of your vehicle at the top right corner of your “About your Tesla” menu. You can activate this Easter egg by tapping the name box; a window will pop up and ask you to name your vehicle. Name it after one of these characters: “Patsy,” “Rabbit of Caerbannog,” “Mr. Creosote,” “Biggus Dickus,” or “Unladen Swallow”.

Once you’ve done this, the “Foot of Cupid” will crash down the screen (you probably know it as the giant foot that recurs in most of Monty Python’s shows and films. Once the app resumes activity, you will have a Monty Python option on your screen that redirects you to the Monty Python YouTube channel.

Rick and Morty

Available on model S, Model X, and model 3.

The vehicle has sentry mode, which is represented in the vehicle display as HAL 9000, which is itself a reference to the movie 2001: A Space Odyssey. The sentry mode can be voice-activated and deactivated by using commands like “Enable/disable sentry mode” or “Turn sentry mode on/off.” However, you can also activate it by using the commands “Keep Tesla safe” or “Keep Summer safe,” which is a reference to episode 6 of season 2 of Rick and Morty. In the show, Rick needs to leave Summer alone in his car in unfamiliar surroundings. To protect her, he orders his vehicle to “keep Summer safe.”

Elon Musk himself is a friend of the show creators and appeared in the show as an alternative version of himself named Elon Tusk.

What have we learned?

Primarily, we learned that Tesla should have a place on your shopping list. We learned the slump is likely to be ridden out and turn into a significant rise. We learned About Tesla’s origins, its future, and its vision.

Most importantly, we learned that Tesla has a lot of Easter eggs and personality.

EverFX is a trade name of ICC Intercertus Capital Ltd., authorised and regulated by Cyprus Securities and Exchange Commission (CySEC) with license number 301/16. ICC Intercertus Capital Ltd. operates in accordance with the Markets in Financial Instruments Directive (MiFID) of the European Union.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read EverFX’s Risk Disclose.