Will Tesla's stock bounce off higher oil prices?

Posted on
22 March 2022
By
Zachary Visconti

As Ukraine faces a relentless Russian offensive, sanctions are leading to higher oil prices, resulting in higher gas costs at the pump for consumers. according to this Oil Price.comThe incident has left many wondering whether higher gas prices could accelerate Tesla’s soaring stock prices and overall adoption of electric vehicles,

Above: Tesla’s Model 3 (Source: Evanex; Photo by Casey Murphy)

Brent crude oil rose to a 14-year high of $139 a barrel earlier this month, compared with the benchmark average of just $70 in 2021 and just $43 in 2016. Analysts at Goldman Sachs and JP Morgan expect the company’s barrels of oil to rise to $135 and $185. respectively this year.

The 14-year price hike came as US President Joe Biden began targeting “the main artery of Russia’s economy” by imposing sanctions on the country’s oil operations, saying the move was “not without costs at home.” ” This “cost” is largely passed on to consumers at the gas pump, which could lead to an even quicker move for non-petrol vehicles than before.

EV automaker Tesla may be uniquely positioned to profit from a price hike, especially since news comes that Tesla has been given final approval to begin production of the vehicles at its new Gigafactory Berlin-Brandenburg and Giga Texas locations. is going. Aided by the new factories, Tesla is also shooting to double its annual production output this year to about 2 million cars.

Twitter: complete mangal list via CNBC

Analysts note that Tesla’s Giga Berlin In Grunheide, Germany is an important strategic advantage for the automaker. Wedbush’s Daniel Ives called the company’s momentum for delivery “extremely solid” despite persistent semiconductor shortages and supply chain issues.

In a note, Ives said he “cannot stress the importance of Giga Berlin’s production to the overall success of Tesla’s footprint in Europe and globally,” pushing his $1,400 price target on the company’s stock to an $1,800 bull case. Price repeats with target.

In addition to higher prices at the gas pump potentially pushing consumers to buy electricity, Tesla’s stock has started to see gains amid record oil prices.

Above: According to Edmunds, the number of people browsing for electric cars has increased as gas prices have climbed (Source: NBC News)

Tesla shares fell to just $764 in February before shooting up to a price of $880 after the first week of the Russian invasion in early March. On Friday, March 18, Tesla shares rose from $870 to a closing price of $905, after a car lease-backed bond sale was halted at $1 billion, reports market inspection,

Some also expect that the demand for oil will decrease amid rising prices. Forbes It was reported earlier this month that there are likely to be fewer vacations in the US this summer as a result of higher gas prices, while states selling high-luxury vehicles like California are reaching new milestones in battery-electric vehicle sales. reaching up.

Tesla is already poised to capitalize on rising oil prices, and it’s unclear how long the higher petroleum costs will last, both of the automaker’s sales (and shares) reaping the benefits of the massive transition to EVs. are starting.

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Source: Oil Price.com , market inspection , Forbes

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Electric Vehicles, Elon Musk, Tesla, Tesla News, TSLA

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