Tesla (NASDAQ; TSLA) stock is up more than 90% year-to-date (YTD) while mainstream auto companies are down 40% as investors bet on the electric vehicle maker during the crisis.
According to a report by Forbes, TSLA stock has continued to rise throughout 2020 and the coronavirus pandemic, despite mainstream auto manufacturers seeing their share prices crash.
Data shows that at the beginning of the year, TSLA stock was trading at about $430, but a rather large uptrend saw its price grow to a new high of $917 before the coronavirus-induced market crash saw it drop significantly. Since then, Tesla’s stock has recovered to now trade at $800.
The ongoing lockdown and economic impact has decreased the demand for new vehicles and reduced the number of drivers. General Motors (GM) shares are down 38% YTD, while Ford (F) has fallen 43% since the start of 2020.
The report claims the coronavirus has disrupted mainstream automakers’ attempt to pivot to electric vehicles, solidifying Tesla’s market dominance over EVs. Tesla has also benefited from the aggressive stimulus policies of the US government.
The S&P 500 has rallied by close to 30% from its March lows, driven by the U.S. government’s aggressive stimulus, and it’s likely that Tesla will be a key beneficiary if the economy improves, given its strong line-up of vehicles including the Model 3 and Model Y compact SUV.
Tesla’s Chinese business, driven by production at its Shanghai factory, has fared well through the pandemic. In March, the company recorded its best ever-month in China after delivering 10,160 vehicles, despite auto sales in the country plummeting 43% year-over-year.
Analysts, as CryptoGlobe reported, have eyed a $2,000 price target for TSLA stock, betting on the company’s growth in China and on its dominance in the EV market being maintained as consumers start focusing more on electric vehicles.
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