With electric vehicles now mainstream, Tesla (TSLA) continues to evolve from an EV pioneer making cool cars to a settler expanding the infrastructure to help keep the industry charging ahead. A new partnership that allows Ford Motor (F) to plug into Tesla’s network of superchargers has Tesla stock charging into a new buy zone.
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The Tesla-Ford agreement only further highlights how the competitive landscape for the best EVs has moved beyond the likes of Li Auto (LI), Lucid (LCID), Rivian Automotive (RIVN), as well as General Motors (GM), Toyota Motor (TM) and the other major automakers.
Building out the infrastructure to charge all these EVs brings in fresh competitors, such as ChargePoint (CHPT), which just reported earnings on Thursday.
As Tesla stock picks up steam, the EV play just charged onto the IBD Leaderboard list of stocks to watch.
Supercharging Expansion
As the Wall Street Journal reported, Tesla will give Ford EV drivers access to Tesla’s network of over 12,000 Superchargers. The move spurs debate on establishing an EV charging standard.
In March, Consumer Reports noted that to enable non-Tesla EVs to use the Superchargers, Tesla developed an adapter known as the “Magic Dock.” The publication added that “to qualify for a slice of the $7.5 billion earmarked for EV charging network expansion in the Bipartisan Infrastructure Law, [Tesla] says it will open up 7,500 chargers from its Supercharger and Destination Charger network to non-Tesla vehicles by the end of 2024.”
In the agreement with Ford, owners of the Ford Mustang Mach-E, F-150 Lightning and the E-Transit vehicle will gain access to the Superchargers beginning early next year.
Tesla Vs. Those Other EV Players
The table below shows how Tesla stacks up against a select group of other players in the EV space. (Automakers such as Volkswagen (VWAGY) and Mercedes-Benz[ticker symb=MBGAF], which don’t have a Composite Rating, were excluded.)
Chinese EV maker Li Auto earns the pole position with a 98 Composite Rating. Tesla stock comes in next with an 81, followed by Ford’s 75.
Visiting China this week, Tesla CEO Elon Musk reportedly told the country’s foreign minister that Tesla is willing to expand business in China. The visit — Musk’s first since early 2020 — comes as EV competition in China has exploded, but Tesla has not given updates on plans to increase output at its Shanghai plant.
Meanwhile, Electrek has reported that Tesla appears to be liquidating the Model 3 ahead of a refresh launch. This comes as Tesla quietly increases U.S. EV discounts.
| Company | Symbol | Comp Rating | EPS % Chg Last Qtr | EPS Est Cur Qtr % | EPS Est Cur Yr % | EPS Est Next Yr % | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|---|---|---|---|
| Li Auto | LI | 98 | 186 | 282 | 367 | 131 | 84 | 90 | C | B+ |
| Tesla | TSLA | 81 | -21 | 2 | -18 | 44 | 93 | 49 | B | C+ |
| Ford Motor | F | 75 | 66 | -32 | -5 | -2 | 79 | 39 | B | D |
| General Motors | GM | 70 | 6 | 46 | -11 | -7 | 76 | 26 | B | B- |
| Toyota Motor | TM | 58 | -4 | -6 | 17 | 8 | 48 | 49 | C | B- |
| Fisker | FSR | 24 | 7 | 24 | 56 | 64 | 26 | 18 | D | D |
| Rivian Automotive | RIVN | 20 | 13 | 13 | 16 | 37 | 26 | 11 | D | D+ |
| Lucid | LCID | 18 | -760 | -23 | -36 | 19 | 15 | 8 | D | B- |
| Nio | NIO | 12 | -165 | -258 | 3 | 71 | 1 | 9 | D | D+ |
Tesla’s Electrifying Market Cap
Like the choppy volatility in Tesla stock, the company’s earnings performance has been sporadic. While the EV pioneer sports average annual EPS growth of 146% over the last three years, quarterly growth has been bumpy.
Q1 earnings slowed 21% to 85 cents a share on a year-over-year basis. Wall Street forecasts an 18% slowdown for the year, but a bounce back to a 44% rise to $4.82 a share in 2024.
Sales growth has been steadier but has also slowed in recent quarters. In Q1, year-over-year revenue rose 24% to $23.3 billion.
In IBD Stock Checkup, Tesla earns a B SMR Rating, which tracks sales growth, profit margins and return on equity. The company also boasts a low 4% debt-to-equity ratio.
The market capitalization for Tesla stock stands at $683 billion, dwarfing Ford ($50 billion) and GM ($48 billion). At $238 billion, Toyota has about one-third the market cap of Tesla. Li tops the other EV companies on this list at just over $29 billion.
Tesla Stock Recharges After Hitting Sharp Speed Bump
After hitting an all-time high in November 2021, Tesla stock slid sharply lower until hitting the brakes in January of this year. The EV giant recharged and flashed six straight up weeks in good volume before running into resistance.
After retreating below its 10-week moving average line in March, Tesla fell below that benchmark before retaking it while forming its current base.
As its relative strength line perks up again, Tesla stock has just cleared its 207.89 buy point. In a sign of rebounding technical strength, the 21-day exponential moving average has climbed back above the longer-term 50-day line. Above-average volume in recent days points to demand for Tesla stock.
The EV giant has zoomed to the top of its buy range, rising again Friday in volume trending above average. Tesla stock is on pace to post a weekly gain of nearly 12%.
The buy range extends up to 218.28.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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