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Shares of Tesla Motors were seen rallying during the course of Tuesday’s session after CEO Elon Musk tweeted announcement of new product.

It was reported that Mr. Musk didn’t disclose any further details, but the announcement seemed to be about Tesla’s Autopilot 2.0 rollout, including the new advanced features relative with the upgrade.  

The automaker is also likely to prepare and reveal a new 100 kWh battery in its Model S and Model X, which could lengthen the range of Model S up to 380 miles from 270 miles.

Meanwhile, Tesla Motors’ stocks gained about 1% after reports on the launching of the battery comprising of the longest range of any electric vehicle (EV).  

The stock finished the session 17% off its 52-week high as it finds support at its 50-day moving average.

Apparently, Tesla sees weaknesses on declining net income, including its poor historical performance in the stock itself and a sluggish growth in its earnings per share (EPS).

Tesla: Insufficient Funds for Model 3 Development

Tesla Motors issued a press release today, which entails about the future of the company itself and the Model 3. However, several analysts were surprised at what the last paragraph said.  

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"While the P100D Ludicrous is obviously an expensive vehicle, we want to emphasize that every sale helps pay for the smaller and much more affordable Tesla Model 3 that is in development. Without customers willing to buy the expensive Model S and X, we would be unable to fund the smaller, more affordable Model 3 development."

Generally, Tesla could not fund their affordable Model 3’s development, without generating sales from their expensive Model S and Model X vehicles. Hearing this, it only suggests that the automaker shows potential complexity on their balance sheet.

EV Manufacturer Makes Offer to Acquire SolarCity

After Tesla’s CEO Elon Musk announced acquisition of SolarCity Corp. up to $2.8 billion, he recused himself from voting on the deal during the board meeting at which it was approved, and is expected to proceed for any vote on the SolarCity board as well.

The said agreement is just right on time as the auto maker is focusing on battery production that is used in conjunction with solar panels. However, the deal is exposed to potential uncertainties and vertical integration of Tesla and could raise more unprofitable operation.  

First Ever Acquisition: Michigan-Based Tool & Die Auto Supplier

After the automaker issued an earnings report for the first quarter, it is likely that the company did go to the heart of America’s auto industry to do an extraordinary thing, which is to acquire business to develop its manufacturing process and perform competently against auto rivals.

During the first ever acquisition of Tesla in May 2015, stock prices opened at 220.86 and touched two lines at resistance 221.56 and 233.89 respectively in an upward trend. Meanwhile, share price continued higher with four consecutive sessions and reached a peak level of 244.60.

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Conclusion

Given that Tesla Motors Co. is focused on its battery production and Autopilot 2.0, shares are currently consolidating at resistance 240.76 and at support 220.53.

Therefore, we concluded that stock prices will slightly rally ahead of the SolarCity acquisition as investors could trade with caution, led by future risks of the Autopilot feature.

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