Breakout Watch: Tesla is evolving from EV pioneer to charging settler

As electric vehicles have become mainstream, Tesla (TSLA) continues to evolve from an EV pioneer making cool cars to a settler expanding infrastructure to move the industry forward. A new partnership that makes it possible Ford engine (F) Joining Tesla’s Supercharger network puts Tesla stock on course for a new buy point.




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The Tesla-Ford agreement only further illustrates how the competitive landscape for the best electric vehicles has evolved Li car (LI), Clear (LCID), Rivian Automotive (RIVN) as well General Motors (GM), Toyota engine (TM) and the other major automakers.

The expansion of the infrastructure to charge all these electric vehicles brings with it new competitors, such as ChargePoint (CHPT), which reports its gains after the market close on Thursday.

Supercharger expansion

As reported by The Wall Street Journal, Tesla will give Ford electric vehicle drivers access to Tesla’s network of over 12,000 Superchargers. The move fuels the debate about introducing a charging standard for electric vehicles.

In March, Consumer Reports noted that Tesla had developed an adapter called the “Magic Dock” to allow EVs from other manufacturers to use the Superchargers. The publication added: “To qualify for a portion of the $7.5 billion earmarked for expanding the EV charging network under the bipartisan infrastructure bill, [Tesla] says it will open 7,500 chargers from its Supercharger and Destination Charger network to non-Tesla vehicles by the end of 2024.”

As part of the agreement with Ford, owners of the Ford Mustang Mach-E, F-150 Lightning and E-Transit vehicles will have access to Superchargers starting early next year.

Tesla vs. these other EV players

The table below shows how Tesla compares to a select group of other players in the EV space. (Automakers like Volkswagen (VWAGY) and Mercedes Benz[ticker symb=MBGAF]that do not have a composite score were excluded.)

Chinese electric vehicle manufacturer Li Auto secures pole position with a composite rating of 98. Next are Ford and Tesla stocks with 81 and 75 ratings, respectively.

Tesla CEO Elon Musk is said to have told the country’s foreign minister during a visit to China this week that Tesla is ready to expand its business in China. The visit — Musk’s first since early 2020 — comes as competition for electric vehicles has exploded in China, but Tesla has not released updates on plans to increase production at its Shanghai plant.

Meanwhile, Electrek has reported that Tesla appears to be scrapping the Model 3 ahead of a new launch. This is happening because Tesla is quietly increasing discounts on electric vehicles in the US.

Pursue symbol Comp Rtg EPS % change last quarter EPS Est Cur Qtr % EPS Est Cur Yr % EPS estimate next year % EPS Rtg RS Rtg SMR Rtg
Li car LI 98 186 282 367 131 84 90 C
Ford engine f 79 66 -32 -5 -2 79 43 B
Tesla TSLA 78 -21 2 -18 44 93 43 B
General Motors GM 68 6 46 -11 -7 76 28 B
Toyota engine TM 53 -4 -3 17 9 48 43 C
fisherman FSR 27 7 24 56 64 26 20 D
Rivian Automotive RIVN 22 13 13 16 37 25 11 D
Clear LCID 21 -760 -30 -36 19 15 14 D
noo NOK 12 -165 -258 3 71 1 10 D

Tesla’s electrifying market cap

Like Tesla stock’s choppy volatility, the company’s earnings performance has been sporadic. While the EV pioneer has posted compound annual EPS growth of 146% over the past three years, quarterly growth has been bumpy.

First-quarter earnings fell 21% year over year to 85 cents a share. Wall Street is forecasting an 18% slowdown for the year but a rebound in 2024 to a 44% rise to $4.82 per share.

Revenue growth has been more resilient, but has also slowed in recent quarters. In the first quarter, revenue rose 24% year over year to $23.3 billion.

The IBD Stock Checkup gives Tesla a B-SMR rating, which measures revenue growth, profit margins, and return on equity. The company also has a low debt-to-equity ratio of 4%.

Tesla’s stock market cap is $655 billion, dwarfing Ford ($48 billion) and GM ($46 billion). At $229 billion, Toyota has about a third of Tesla’s market cap. At just under $29 billion, Li tops the other EV companies on this list.

Tesla stock rebounds after sharp drop in speed

After hitting an all-time high in November 2021, Tesla stock tumbled sharply until hitting the brakes in January of this year. The EV giant charged and soared at good volume for six weeks before meeting resistance.

After falling below its 10-week moving average in March, Tesla fell below that benchmark before retaking it while also forming its current base.

As the relative strength line rises again, Tesla stock is now racing towards a buy point of 207.89. The 21-day exponential moving average has climbed back above the longer-term 50-day moving average as a sign of recovering technical strength. The above-average volume over the past few days indicates demand for Tesla shares.

The EV giant slipped early Thursday but then found traction. With an above-average increase in volume of around 1.5%, Tesla is now just below the buy point.

As Tesla continues to drive the EV and charging revolution, watch out for the stock to break the buy point with volume at least 40% above average.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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