Tesla is set to hold its investor day on Wednesday, with CEO Elon Musk teasing a reveal of "Master Plan 3" details. Following its past pattern ahead of the event, Tesla stock booked its first weekly slip following a steep six-week climb but is now on the march again.
Last week, Tesla stock retreated more than 5% but has been gaining again this week. Tesla stock has more than doubled from its Jan. 6 bear-market low of 101.81, following a historical pattern of TSLA shares running up ahead of similar events. In 2016, Tesla stock went on a monthlong 22% run ahead of Musk's second "Master Plan" announcement on July 20, 2016.
"While the sample is relatively small, TSLA has — perhaps surprisingly — underperformed in the week before (by 200 bps) and the week following (by 600 bps) investor events over the last three years," Bernstein analyst Toni Sacconaghi wrote Wednesday.
"All eyes are on TSLA's upcoming investor day on March 1 and we note that TSLA shares have tended to run up ahead of such events in the past," CFRA analyst Garrett Nelson added recently.
Mexico President Andrés Manuel López Obrador said Tuesday Tesla plans to build a manufacturing plant in Monterrey. The Mexico president said additional details will be released Wednesday, the Wall Street Journal reported.
Tesla stock gained 1.5% early before dropping 0.6% to 206.31 Tuesday during regular market trade. On Monday, TSLA shares surged 5.5% to 207.63. Last week, Tesla stock fell 5.5%, but shares have still more than doubled since the Jan. 6 low of 101.81.
Tesla stock appears to be forming a handle of some sort. If Tesla stock consolidates through Wednesday, a breakout then would likely involve clearing the 200-day moving average.
Master Plan Number 3
Tesla's first Master Plan, revealed in August 2006, presented the company's goal to build a wide range of EVs. Ten years later, Musk revealed his second "Master Plan." That focused on self-driving capability and battery energy storage systems.
Musk says his "Master Plan 3" is about a "path to a fully sustainable energy future for Earth."
However, the billionaire CEO has been mostly mum on details. Musk on Wednesday said March 1 will be an event for investors "in Earth." His comments came during the unveiling of Tesla's Engineering HQ in Palo Alto.
Musk added March 1 will be about "explaining how we get to a fully sustainable energy future and that people should have optimism and hope for the future."
Futures Fall After Market Closes Poorly; Tesla Sets Up For Investor Day
Tesla Stock: What the Analysts Expect
CFRA's Nelson wrote Tuesday he expects to hear details regarding Tesla's near and long-term growth plans. The analyst predicts details on the Cybertruck will be revealed as well as plans to meet "ambitious auto production goal" of 20 million units by 2030.
Nelson said this likely will include the introduction of a low-price compact EV model, future factory expansions and growth in the solar and energy storage businesses.
Sacconaghi wrote last Wednesday the "most important issue" for Tesla is the status of its next-generation, lower-cost vehicle platform.
"We/investors have no expectation for a product announcement, but incremental detail on pricing, offering and especially timing is most important," Sacconaghi wrote.
Tesla has repeatedly teased an EV that would sit around the $25,000 price point. CFO Zachary Kirkhorn during the Q4 earnings call said the "next-generation vehicle platform" was a priority. This could mean the cheaper, elusive, Tesla Model 2 could be floated on March 1.
However, Sacconaghi's view is Tesla will not be able to deliver a lower cost platform in high volume by 2025.
Tesla likely will reveal HW4.0, the latest hardware for driver assistance, including better chips, more cameras and the return of radar. Musk said that all Tesla EVs were "hardware ready" for full self-driving as of 2016.
The EV giant is also likely to discuss its battery production efforts and its Nevada plant expansion to make 4680 cells.
Deutsche Bank analyst Emmanuel Rosner also expects Tesla to introduce its lower cost third generation vehicle platform on March 1. Rosner on Thursday wrote the EV giant will speak about the role of in-house battery manufacturing technology, capacity expansion and actions to secure raw materials — including lithium.
Controlling Lithium Supply
Tesla is reportedly mulling a possible bid for Sigma Lithium, according to Bloomberg. Sigma Lithium has no sales, but is poised to start commercial production at its Brazil site in April. SGML shares soared 16% on the news Tuesday.
Tesla has already made progress on building a lithium processing facility in Texas, which will be the first of its kind in the U.S. Tesla has confirmed plans to invest $365 million in the lithium plant. The company has said commercial production could get underway by the end of 2024.
Tesla stock ranks fourth in IBD's Auto Manufacturers industry group. TSLA shares have a 73 Composite Rating out of 99. Tesla stock also has a 25 Relative Strength Rating. The EPS Rating is 99.
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