close up of illuminated text against black background

Just over two weeks ago, I included Tesla (NASDAQ:TSLA) in our top 3 large cap picks. I said a pullback to $650 would be a good buy zone. That was reached the same day as Tesla shares fell another 3.5%. From $650, the Tesla share price bounced over 14% and now sits at $729. Here’s an update on what’s happened with Tesla, and what will happen next.

Tesla all-hands on meeting

According to reports, Tesla and Elon Musk held a meeting which all employees could dial in for. A few points of interest were brought out that we can look into.

Firstly, the Cybertruck will be delayed. It was originally scheduled for a 2021 release, but that had slipped away into a 2022 release. It now looks like the first models will be released at the end of 2022, with large scale production shipping happening in 2023.

The second point brought out was the launch date for a new model. The Tesla Model 2 will launch in 2023 (if we don’t have any more delays). What is interesting about this model is the price. At $25,000, this is a very reasonable car that will help Tesla tap into a broader market. They started off with the Model S and X being priced above $75,000 each. More recently they released a Model 3 and Model Y. Although both are more affordable versions of the previously mentioned models, they are still priced at $34,000 and $48,000 respectively.

This new model and its pricing will broaden the customer base for Tesla, helping them to diversify across markets. Ford (NYSE:F) is a big competitor for Tesla to compete with. But Ford currently has the benefit of a much wider price range, taking the customers that are looking for a more affordable budget car. This expansion to Tesla’s market will benefit them in the long run.

Where does the price go from here?

I see Tesla shares dropping to around $700 and then test recent levels of $740 again. I believe $780 will be seen after that, still within the next few weeks. My price prediction of $1,000 by the end of next year (37% increase from current levels) is still on. In fact, I believe there is more of a chance we see $1,000 before the summer of 2022.

Final thoughts

The demand for EV vehicles will continue to grow. The US Senate has passed an infrastructure bill that will see $1T put into EV charging. This will make EV vehicles even more accessible in the next few years. Tesla still remains one of my top large cap picks for your portfolio, both short and long term.

2 thoughts on “Tesla shares look set for further progress”

Leave a Reply