TSLA Analysis: Tesla Shares Get Supercharged. Is This a New Trading Era?

FXOpen

On of the many disruptive masterstrokes which was cleverly considered by Elon Musk and his team of Silicon Valley tech superstars when launching the Tesla company was to build in a form of ‘forced loyalty’ which would give the company a continued revenue stream even if the traditional motor manufacturers attempted to jump on the bandwagon.

Tesla may well have attempted to reinvent the way the automotive industry operates by coming from the outside with a totally different approach, turning on its head a highly established global industry with over 130 years of gradual progress under its belt, however, it was a calculated disruption, as the company considered what would happen should the giants of Detroit, Aichi, Seoul, Stuttgart and Gothenburg suddenly attempt to rival it with high performance electric cars which would have the added ingredient that Tesla lacks – pedigree.

It was inevitable that this would happen, and it did. Nowadays, just less than a decade before the Tesla Model S hit the streets, every automobile manufacturer in the world has rolled out a range of high-tech electric cars.

Tesla’s ace card was to build the infrastructure required for practical, quick charging and ensure that it keeps its own product on its own network, rather similar to the method used by mobile phone airtime providers by locking the latest smartphone handset to their network.

Tesla’s ingeniously named ‘Supercharger’ network is now a recognizable brand in itself, the red and white terminals having been installed across the world.

The rest of the industry uses the ‘Menekkes’ system, however, Tesla has managed to keep its customers from straying by using the Supercharger as a retention tool and extra revenue generator as it owns the entire charging network.

Now, Tesla has another trick up its sleeve, which is to begin to allow other vehicles to connect to the Supercharging network.

This was announced this week, and the result is that Tesla shares have soared to a six-month high, today beginning the trading day at USD 274.45 per share.

That is a 45% increase in the last 30 days, and a staggering 99% increase in the past six months.

Indicative pricing only

Indeed, Tesla shares have been notoriously volatile over the past few years, rather more so than the more conservative ‘big tech’ firms with which it rubs shoulders on the premium end of the NASDAQ listed corporate giants, largely due to Elon Musk’s flamboyant nature of conducting ‘world firsts’ such as making Tesla the first corporate cryptocurrency ‘whale’ without so much as a slight amount of pushback from shareholders or NASDAQ itself.

The accessibility by other vehicle users to the Supercharger network is a potentially huge revenue booster for Tesla, as it can now sustain itself via a method which does not only rely on electric vehicle sales and leasing, but also on charging other vehicles to use a network that it has installed almost globally.

So far, it is other North American car manufactuers that have shown interest in securing access to the Supercharger network, two of which are absolute stalwarts of the automotive industry, General Motors (GM) and Ford Motor Company, and the other being a similarly tech-focused start-up in the way Tesla was 10 years ago, that being Rivian, manufacturer of the R1T electric truck.

There is an unwritten rule that whatever America does, the rest of the world follows, and in the automotive industry throughout the decades that has certainly rung true. It was not a coincidence that the Toyotas and Nissans of the 1970s appeared to emulate popular American cars of the time and incorporated features invented in Detroit.

Whether this upward move for Tesla’s stock is a sign of things to come as more car manufacturers show interest in accessing the Supercharger network, or whether Tesla will make any sudden announcements that would dampen this down is yet to be seen.

An interesting thing to observe, nonetheless!

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