Tesla surges stunning 20% as investors rethink batteries and full self driving

Tesla shares rocketed by another 20% on Monday in the US, riding high on news of a first quarterly profit for Panasonic’s electric vehicle battery business venture with Tesla, significant analyst re-ratings, the promise of full self driving and expectations of a “huge” battery day in April.

The Tesla stock jumped a stunning $US138 ($A200) to $US780 ($1165.53) a share on Monday, and a market value of  $US140.59 billion ($A209.22 billion). The biggest losers were the short-sellers who had bet on Tesla failing, and who found themselves down another $US2.5 billion ($A3.74 billion) in mark-to-market losses.

Tesla has started the year with a gallop: the opening of its Shanghai factory, a record number of deliveries for the fourth quarter of 2019, a quarterly profit, steady cash flow, and plans to build a fourth factory near Berlin, along with the imminent release of the Model Y.

The market surge, which has seen Tesla’s share price more than quadruple from its lows in May last year, means Tesla is more than just an “existential threat” to legacy car makers: it is now the second most valuable car company in the world, behind only Japanese automaker Toyota.

And analysts are predicting its stock value could jump higher, potentially much higher.

Argus Research analyst Bill Selesky has raised his price target from $US556 ($A830.89) to $US808 ($A1,207.48), implying another gain of 11% on top of Monday’s surge.

“Our positive view assumes continued revenue growth from the legacy Model S and Model X, as well as strong demand for the new Model 3, which accounted for more than 80% of (fourth quarter’s),” Selesky wrote in a note to clients according to Street Insider.

Meanwhile, Motley Fool reports that ARK Invest, an investment firm focused on disruptive and innovative companies, has suggested Tesla shares will be worth an eye-watering $US7,000 by 2024. That implies a market cap of $US10 trillion.

“Based on our updated expectations for electric vehicle (EV) cost declines and demand, as well as our estimates for the potential profitability of robotaxis, our 2024 expected value per share for TSLA is $7,000,” ARK Invest wrote in a note to investors over the weekend.

Tesla’s robotaxi business is the self-driving taxi service that CEO Elon Musk wants to launch in coming years, depending on technical progress and regulatory approvals for full self driving (FSD).

Musk is seeking to accelerate the arrival of FSD via a “hackathon” AI party at his house in one month’s time to which he hopes to attract fresh minds.

In other news, Panasonic – which today also announced a partnership with Toyota to make more lithium-ion batteries for electric vehicles – said it had made its first quarterly profit from the joint venture with Tesla that oversaw the building of Tesla’s Nevada Gigafactory.

“We are catching up as Tesla is quickly expanding production,” Panasonic Chief Financial Officer Hirokazu Umeda told an earnings briefing, referring to battery cell production.

“Higher production volume is helping to push down materials costs and erase losses.”

And battery production and battery duration promises to be the key points of Tesla’s upcoming “Battery Day”, which is to be held in April.

Expectations are that Tesla will reveal developments in battery technology that will allow its vehicles to exceed 640km driving range. But it might be more than that, because CEO Elon Musk promises it is “going to blow people’s mind“.

This has been backed up by Tesla electric vehicle Youtuber Sean Mitchell, who says he signed an non-disclosure agreement with Musk to pick his brain on what that will entail, and that it is “really, really big”. (See the video of that here.)