Topline
Tesla shares are on track Friday to post their largest daily gain in more than two months, furthering their recent meteoric rise fueled by faith in the expansion of a key alternative revenue stream that analysts predict could add billions of dollars to Tesla’s top line.
Key Facts
Tesla shares set a fresh eight-month high on Friday, jumping 6% to $249 by 10 a.m. ET, after the firm said Thursday afternoon it will open its Supercharger network to General Motors electric vehicles, coming on the heels of a similar announcement for Ford EVs two weeks ago.
This represents “a large monetization opportunity” for Tesla, Wedbush analyst Dan Ives said in a Friday note to clients, upping his price target for Tesla by 40% to $300.
Tesla stock is now up some 35% since announcing the Ford charger deal May 25, tacking on some $205 billion in market capitalization during that time frame.
That’s by far the largest gain of any S&P 500 stock during the period, according to FactSet data; the S&P is up a comparatively meager 4% over the last two weeks.
Crucial Quote
“Tesla is in a massive position of strength after building its EV castle and now is set to further monetize its success,” Ives wrote Friday, pointing to the company’s increasing ability to bring in revenue outside of EV sales. The Elon Musk-led firm should net another $3 billion in new revenue from Ford and General Motors’ EV users, Ives estimated.
Contra
Tesla’s services unit, which includes charging sales, accounted for less than 10% of the company’s $81 billion in 2022 revenue. This segment is actually far less profitable than Tesla’s broader business, with its 8% gross profit margin during 2023’s first quarter weighing down the company’s broader 20% pre-tax margins. Goldman Sachs analysts estimated last year the expansion of Tesla’s charging network to competitors would bring in between $1 to $3 billion in added annual revenue for Tesla, while Goldman’s Mark Delaney called the Ford partnership just a “modest incremental positive” for Tesla’s valuation.
Forbes Valuation
Musk regained his spot as the richest person in the world this week, according to Forbes’ calculations. His $229 billion net worth is nearly 70% higher than it was when Tesla stock hit a multi-year low in early January, when it sat below $140 billion.
Surprising Fact
General Motors rode the Tesla news to 4% stock gain Friday, while Ford stock notched its biggest rally in seven months the day after it announced its charging team-up. Ford shares are up 22% over the last two weeks.
Ford Stock Rides Tesla EV Partnership To Best Day Since October (Forbes)
Elon Musk Ends Day As World’s Richest Person For First Time In 6 Months (Forbes)
Tesla Will Add General Motors To Charging Network—Nearly Two Weeks After Giving Ford Access To EV Charging Stations (Forbes)
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