The American automaker and energy storage giant Tesla was recently locked in a tight trading range after expansion effort and negotiations on battery storage projects. Tesla has been betting on software development and batteries for the longest time amid the tight competition in the market. Given the current trend of the stock, will Tesla be able to find a lift before it drives even lower?
Tesla in Australia
Last week, CEO Elon Musk had an exchange of twitter posts with Australian Magnate and Atlasssian co-founder Mike Cannon-Brookes regarding the battery plan to end the energy crisis in Australia. Tesla proposed the deployment of its batteries which can provide approximately 300 megawatt hours of energy to solve the blackouts.
Musk included in its posts that Tesla will get the system installed and working 100 days from contract signature or it is free. He also expressed the willingness of the company to “fixed and open pricing and terms for all products.”
On the other hand, Cannon asked for seven days “to try sort out politics & funding,” and a quote for the approximately 100MW cost. Cannon has been vocal in his support of software and innovation to address the current South Australian power woes.
On the latest twitter posts, Musk acknowledged the support of many Australians on Tesla’s battery plan. Aside from Cannon, Tesla has caught the interest of the South Australia’s government leaders. Premier Jay Wilson Weatherill revealed the positive discussions he had with Musk.
After an approval, Musk is confident that Tesla could build a 100 megawatt battery farm for $33 million in less than four months only. The battery technology of Tesla has been evident through its recent projects which include the Southern California Edison Mira Loma substation, the American Samoa installation, and the Kauai Island Utility Cooperative project.
On Tuesday, Premier Jay Wilson Weatherill and Energy Minister Tom Koutsantonis are expected to disclose the new energy policy which may highlight the result of government’s intervention in the market after the series of high prices and outages.
Tesla has been putting an extra hand in widening of its battery factories. The Gigafactory is set to begin production by the end of 2017 as it ramps up the production of its electric vehicles. In January, the company started the production of battery cells for energy storage products while the locations for other Gigafactories are expected to be finalized soon.
Tesla in Texas
Tesla has not put its guard down on the fight to operate up to 12 stores in the state of Texas as it pushes another bill which favors vehicle manufacturers. The American automaker juggernaut is not giving up in the huge potential in the Texas market.
According to State Representative Jason Isaac, the free market bill will simply allow manufacturers of vehicles any weight, class, size or share to sell directly to the customers.
David White, a former Spokesperson of Tesla, explained on his Twitter posts that it is all about the consumer and it’s the direct sales model Texans have been asking for. White confirmed that "There are no carve-outs, incentives, subsidies, breaks or deals for any manufacturers here."
Stock Market Movement
Amid these business ventures of Tesla, the stock has been performing poorly, heading to a likely bearish trend. Tesla dropped to 243.00 levels at the end of February and the current stock movement portraying the same figures. Although green candles appeared last week, the momentum was not kept as the stock completely dropped last Friday.
In the pre-market session, Tesla lost 0.29 percent to $242.98. The stock moved a bit higher at $243.69, but still down 0.49 percent with a session high of 246.54 and a session low of 243.00. Tesla has a market capitalization of $39.20 billion.
Apparently, the stock trades in the red zone, losing 3.13 percent in the last five trading days and declined 7.02 percent in the last 4 weeks.
With the recent gamble of the company on its investments and proposals, market players may set aside their enthusiasm for the stock, despite the emergence of the fresh Tesla Model 3 prototype. However, the current tone of the stock may just be temporary knowing the capability of Elon Musk to put everything in favor for Tesla.
In the last three months, Tesla stock has climbed 26.17 percent –definitely something to consider. Further, its year-to-date stock performance is at 14.04 percent. In the last quarter of fiscal year 2016, the company reported $2285.00 million, beating the expected $2204. 13 million and showcasing 88.2% increase compared to the same quarter last year.