After a period of calm, the share price of Tesla Inc. suddenly jumped by around 6% on 8 January. Possible factors behind this surge include the production ramp-up of Tesla’s Model 3 sedan, the publicity surrounding the expansion of Tesla’s electric vehicle charging (EV) network, and the bullish outlook on lithium stocks.
On 6 January, Tesla’s CEO Elon Musk announced via social media that the company will built a Supercharger station featuring a classic style drive-in restaurant in Los Angeles. Tesla has recently been focusing on growing the network of the Supercharger stations that exclusively serve its own brand vehicles and provide faster charging compared with EV charging systems from competitors.
According to Musk’s conversation with his followers on Twitter, the “old school” themed Supercharger station/restaurant in Los Angeles will also have a drive-in movie theater with popcorn on the menu. Musk wrote that the outdoor movie screen will show highlight reels of popular movies.
This proposal has received huge amounts of popular support, just like the Instagram post that he made last month about sending a Tesla Roadster on a SpaceX rocket flight to Mars. It is not clear whether Musk is serious about building a Supercharger station with a drive-in restaurant and an outdoor movie theater. However, this news and the recent positive reporting on Model 3, which is Tesla’s first economically priced vehicle model, appear to have some noticeable effect on the stock market.
Musk later did provide photos of the original Tesla Roadster being loaded into a SpaceX rocket, thus confirming that his company will send a Tesla vehicle to Mars very soon.
Musk’s interactions with customers and fans on social media platforms like Twitter tend to be part of Tesla’s publicity campaigns hinting at the company’s new technologies or upcoming products. On the other hand, some skeptics of Tesla assert that Musk’s announcements are stunts to distract the public and investors from critically examining the company. After all, Tesla has repeatedly missed its own vehicle delivery targets and burned through huge amounts of cash to ramp up vehicle production.
Another important trend that may have contributed to the surge in Tesla’s stock price is the bullish market for lithium ores and lithium-based materials. Analyst Ben Kallo from financial services firm Robert W. Baird & Co. has just upgraded the value of the US mining and chemical company Albemarle Corp. Kallo cites the bright outlook on Albemarle’s lithium battery business. Furthermore, the upgrade report includes a mention that the production of Tesla Model 3 is expected to be on a steady increase.
Kallo’s analyses on Albemarle and Tesla has been widely circulated in financial media platforms such as the Motely Fool and Benzinga. According to media, Kallo believes that the supply-demand relationship in the lithium market over the next several years will either be in balance or in tight supply. In the medium term, demand growth is anticipated to catch up to and may even exceed supply growth. At the same time, Albemarle is expected to expand its lithium production as per its plan.
In addition to the rising production of Tesla Model 3, Kallo has pointed to other events that will help push up the share price of Albemarle, such as unveilings of new EVs at upcoming auto shows. Also, other major auto OEMs may soon unveil their EV plans.
(Photo Source: Tesla Inc.)