Right now there is a huge push for people to start buying electric vehicles. Some governments have even gone as far as to say that in the next decade, fuel-powered vehicles will be outlawed. You don’t have to be a genius to know then that installing electric vehicle charging points at home can add significant value to your property’s potential sale price. Having charging points installed will mean that if you decide to sell your house in the future you can get a much better deal for it. Charging points are by no means cheap to install, however; they are not cheap to run.
Increasing your property’s value can help you to get more for it if you decide to sell. A house is an investment, not something you should hold onto forever. Adding charging points is just one way of increasing your property’s value; there are many others. This post will explore this topic in more detail, telling you how charging points can boost your home’s sale price as well as telling you about some other things you can do to maximize your property’s value.
Finding Properties for Sale
You may have found this page not because you are interested in getting an electric vehicle charger installed but instead because you want to buy a house with one. In order to cater to individuals like yourself (if that is why you are here) then this post will first tackle how to find a house to buy. You can of course search homes for sale at eXp Realty or on one of the other online property marketplaces. Using realty sites is perhaps the easiest way to find a property. These sites exist solely to help people find their dream homes.
1. Realty Sites
As mentioned previously, the first thing you need to do to find a house for sale is to sign up for a realty site. On a realty site, you’ll be able to see all of the listings in your area. The good thing about realty sites is that they are abundant and all have their unique listings, meaning different sites will show different properties. You should sign up for more than one if you want to buy a house. Avoid sites like those run by the Zillow Group as they are notorious for selling people’s personal information to marketers.
2. Hiring a Realtor
An alternative to using a realty site is hiring a private realtor, ideally, one that works for a reliable and trusted company in your area. Finding realtors to hire is not difficult since they exist in most of the world’s towns and cities. If you cannot find any in your immediate area then you will certainly be able to find some to hire online. Before you hire a realtor you need to conduct extensive research and read their reviews. A realtor’s reviews can give you a clear idea about what it is going to be like working with them.
Right now there is a huge push for people to start buying electric vehicles.
3. Determining Needs
What specifically do you need your new house to have? Obviously, because you are here in this article you need an electric charging point. Beyond charging points, what else do you need? Do you need a garden or a two-car garage? Will you need your new house to be in a good school district? Thinking about these things before you start searching will help you to find a house that’s right for you. A lot of people make the mistake of trying to come up with their needs after they start searching.
4. Considering the Location
Location is everything. If you buy a house in a bad area then your life will be plagued with crime and chaos. Avoid deprived areas if you can. If you are on a budget then you can find a house that’s not in an impoverished area by buying rurally. Rural properties tend to be significantly cheaper than urban ones. When you buy a rural property you need to make sure that you are getting one in an area with good transport links, however. Otherwise, you could end up being completely cut off from the town or city where you work.
Electric Charging Points
Moving away from how to find the house that’s right for you and onto how electric charging points can boost your home’s value (because they most certainly can); the first thing you need to think about is installation. Installing electric charging points is by no means cheap, as stated already. The installation of charging points can cost thousands of dollars. Individuals who’re on tight budgets can still get them installed by paying for them on credit. The vast majority of contracting firms accept credit.
Why can electric charging points increase your property’s value, you might be wondering? As mentioned earlier, in the near future, fuel-powered cars are going to be illegal in many countries, including the United Kingdom. Further production of them is going to cease in other parts of Europe. In the United States no definitive plans have been drawn up yet, though climate advocates and people who’re very passionate about the environment are arguing for them to be banned. Installing a charging point on your property somewhere will mean that if in the future fuel-powered cars get banned where you live, people will be more interested in buying your house.
Installing electric charging points is by no means cheap.
If everybody’s driving electric cars then everybody’s going to need charging points. However, because charging points are only going to get more expensive as demand increases, the average person isn’t going to be able to afford to install them at their homes. By installing them now while they are reasonably affordable (or while credit is a possibility) you will be able to avoid high future costs and boost your property’s resale potential. Make sure that you hire a professional team of contractors who have received good online reviews to install charging points for you.
Electric Vehicles
Electric vehicles are much better for the environment than cars that use fuel. Studies show that if all of the world’s countries collectively begin using more electric vehicles then global carbon emissions will fall exponentially. It should be noted that at this time the production of electric cars is not exactly good for the environment and the batteries used in these vehicles can be very harmful. That being said, electric cars are a lot better than petrol- or diesel-powered ones. Beginning to use them could be your way of contributing to the environment and fighting climate change.
Electric vehicles are very expensive but analysts predict they are only going to rise in price. It’s theorized that in the future people will not own cars but instead, they will rent them, mainly because of how expensive they are. If you are somebody with a lot of disposable income right now then you might want to buy yourself an electric car so that in the future you can guarantee that you own one. Make sure you conduct a lot of research and find a reliable company to buy from like Tesla, so you can get a car that’s going to retain its value and perform well in the future.
Increasing Property Value
Interior Design
One of the first things you should do if you want to boost your property’s value is to redesign its interior. A lot of people’s homes look terrible inside. The main reason so many people’s houses look awful within is that they have absolutely no knowledge whatsoever of how to design a house. The average person’s idea of what a good house looks like is a design copied straight from an interior design magazine. Your house should be a reflection of you. A house that’s copied from an interior design magazine will look hollow and empty. A house you design based on your interests will look characterful, warmer, and more desirable to homebuyers.
One of the first things you should do if you want to boost your property’s value is to redesign its interior.
If you have no idea how to redesign your house and are not confident decorating it yourself then instead of attempting to do it independently, hire an expert interior designer. Interior designers are not exactly cheap but can be very helpful and can add a lot of value to your house for you. They may also be able to make suggestions about other areas of your house like its façade or the backyard.
Landscaping Yard
Your home’s backyard should be one of your main focuses if you are interested in upgrading it and improving its value. A lot of people overlook the fact that a landscaped and cared-for backyard can add significant value to your property’s sale price. Landscaping is not something the average person can do on their own, however. Instead of attempting to landscape your yard yourself, you should hire an expert to do it for you. A professional gardener will be able to add trees, flowers and plants to your backyard that improve its appearance and of course its value.
You also need to think about your home’s façade. A lot of people make the mistake of thinking that they only need to worry about their properties’ interiors but this is not true. Your home’s façade can have just as much impact on its value as its interior can. Do not be one of those people with an immaculate house inside but a horrid one outside. A good way of improving the outside of your house is by repainting it. If you do not have the skills to repaint an entire house then you can hire somebody to do it for you.
Smart Gadgets
Another highly effective way of boosting the value of your house is to invest in smart gadgets. A lot of people underestimate how much money they can add to a house’s sale value. Smart gadgets are great because they work fantastically with electric charging points in that the same people who’re interested in investing in charging points and who have electric cars tend to be forward-thinking, technologically savvy individuals. Investing in smart gadgets for your house can be a good way of making it more desirable.
If you are unsure what gadgets you should be adding to your house then ideally they should be ones that improve its general functionality. Many smart gadgets today can be connected to smartphone apps and you can operate home appliances from your mobile device. Security gadgets are great investments too. Do not make the mistake of thinking that your house will protect itself. Fraud and crime are through the roof right now. Investing in gadgets designed to look after your house while you’re not there like smart locks, alarms, and cameras can make it a much safer place for your family and for the families of people who buy it in the future.
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Timing Sales
If you are planning on selling your house in the future then you need to try and learn about market conditions at the time that you are selling. The property market is constantly fluctuating and changing; people who have never sold houses before underestimate how complicated the process can be. A good way to learn about how the market’s currently performing is to read guides or blogs. If you do not have the time or energy to read realty guides then hire a professional realtor and ask them to help you sell your house. A realtor will be able to work with you to figure out when’s the best time to sell it.
In addition to knowing what market conditions are like in your country or state, you can also use realty platforms to find out how many houses are selling in your area. Getting an idea of current sale prices in your area will help you to figure out how much you can sell yours for. Make sure you factor in the additions you have made to your house when you are working out a price you want to list it for.
Electric car chargers can add value to your house but so can the other things mentioned here. Individuals who’re interested in selling their houses need to spend a lot of time improving and upgrading them so they can get the best price possible. Never sell your house without making a profit on it.
The SEC filings show Musk’s transactions occurred between August 5 and August 9, shortly following the electric vehicle company’s 2022 annual shareholder meeting on August 4 in Texas.
Previously, Musk had announced on social media that he had “no further TSLA sales planned” after April 28.
The CEO’s latest stock move has prompted supporters of the EV brand to question if Musk is now truly finished selling Tesla shares and if he might repurchase the shares in the future.
In response, Musk said, “Yes. In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.”
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On a valuation spectrum between penny stocks and blue-chip stocks, growth stocks take a peculiar position. Although they are not as nearly as speculative and volatile as penny stocks, growth stocks are based on the expectation they will eventually assume the highest form - blue-chip stocks. After all, blue-chip companies are perceived to deliver both dependable dividends while also growing.
Netflix And Tesla: Two Sides Of The Growth Coin
On this expedited growth journey, some companies fumble while others take a category of their own. This process appears to be unfolding with Netflix and Tesla. Netflix's April earnings report tells a story of hitting the brick wall of expectations, while Tesla's valuation forecast seems to be boundless.
Netflix Stock Ousted From The Growth Club?
Netflix gained its momentum by naturally filling the niche of a dying breed, the video rental business spearheaded by Blockbuster. In fact, the CEO of Blockbuster, John Antioco, spectacularly failed to notice the new video-streaming trend on the horizon. Netflix founders approached him in early 2000 to sell Netflix for $50 million.
Fast forward to late 2021, and Netflix grew by 7,536%, from a $50 million deal offer to a $318 billion market cap. As growth tech companies go, replacing and cornering a specific market, one couldn't have asked for a better result. However, year-to-date, Netflix (NFLX) dropped to rock bottom in early 2022, returning to a December 2017 level market cap of $83.36 billion.
Did Netflix lose its growth stock status?
Not quite. The Covid-19 pandemic may have pumped Netflix's usage as the go-to content delivery platform, but Netflix’s valuation has been heavily reliant on subscriber numbers. It has been an open secret that Netflix has an account sharing problem, which the company tolerated to spur growth, openly admitting as such this April, in a letter to shareholders.
"Our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently."
There are two key admissions here. The baseline for Netflix’s valuation is largely inaccurate because it relied on account sharing. Moreover, with the Covid-19 boost gone, the company is now forecasting a decline in subscribers by 2 million for Q2 2022. Hence, this is why Netflix suffered a valuation reset back to a late 2017 level, as Bank of America downgraded its ranking from "buy" to "underperform" in April.
With a new reset price, Netflix's explosive growth narrative is over, but it also serves as a new starting point. Yet, Netflix itself admits that it will take at least until 2024 until its password-sharing crackdown and ad-boosted subscription monetisation produce a major effect.
Bank of America analyst Nat Schindler said, "It will take a while for investors to believe Netflix can return to growth."
With that said, Netflix revenue for Q1 2022 is still up by 9.8% compared to the same quarter a year prior, at $7.8 billion. While that is not hyper-growth, it is growth nonetheless. When all is said and done, shouldn't it be the case that the removal of unsupported growth figures has the same valuation reset effect on another growth company?
Tesla Continues To Defy The Odds
Tesla's April earnings report showed that the company has 6.5x stronger sales than the year prior. The EVs generated $3.3 billion in Q1 profits, a 658% increase from Q1 2021. Moreover, Tesla reported an 81% increase in total revenue, to $18.8 billion. While these figures are positive, do they justify Tesla's enormous market cap of $797.7 billion?
In other words, is another valuation reset incoming? Over the last 5 years, Tesla's story was one of hyper-growth just like Netflix, gaining 1,137% appreciation. Year-to-date, Tesla (TSLA) stock too suffered a downturn, but not as nearly as much as Netflix (NFLX).
If anything, it seems that Tesla's downturn can only be attributed to the general equity market decline due to the Fed's interest rate hike. The Fed tapering increases borrowing costs, so investors tend to exit growth — and especially tech — assets into safer commodity harbours.
Yet, at face value, if any company is due for a valuation reset it would be Tesla. Elon Musk's baseline business model revolves around manufacturing and selling electric vehicles (EVs). Yet, it has done so at a considerable lower rate than traditional car companies.
Case in point, Ford sold 3.9 million cars in 2021, while Tesla sold less than one million, at 937,172, in the same year. Tesla's market valuation does not reflect this gap in the slightest. In fact, when compared to top car companies, one would think that Tesla is the largest vehicle manufacturer in the world. This leads many investors to classify TSLA as an overvalued stock.
What else is then in play for Tesla to maintain its hyper-growth valuation? Does it mean that Tesla's expectation is more valid than that of Netflix?
Before anything else, Tesla has the first-mover advantage in the area that counts the most. While there were plenty of EV companies before Tesla, it was the first company to pull out EVs from the cumbersome EV aesthetic. While Tesla had to push their EVs into the luxury vehicle category to make that happen, it successfully made their cars into status signalling devices.
Governments all over the world further boost this speculation by announcing the gradual ban of gas-operated vehicles. For this reason, there is now the expectation that most vehicles on the road by 2040 will be electric, with Tesla forging the way.
Consumer behaviour has become a factor as well. Despite car insurance rates being generally more expensive for EVs as opposed to traditional gas-powered vehicles, Tesla has taken strides to make their vehicles more affordable. Yet, they also tend to be used as a status signalling vehicle, which generally happens with luxury products.
Combined with Elon Musk's omnipresent online persona, with over 80 million Twitter followers, and SpaceX involvement, this creates a big cushion for Tesla. So much so that not even major supply disruptions can upset Tesla's gains.
With so much market upheaval, it bears remembering why the average stock market return for the last 100 years has remained steady at 10%. While it is anyone's guess if Tesla will keep this momentum going, it also bears keeping in mind that Tesla made it through while openly admitting past underperformance and future downturn.
"Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022."
Given such contrast, it is safe to say that Tesla is in its own premium growth stock category, especially now when gas prices are soaring. Case in point, AAA research showed significant pressure to make the transition to EVs when gas prices are up.
At the same time, Netflix, as a software platform, is more of a "take it or leave it" proposition, with many people opting for the latter, viewing Netflix as a luxury item in times of economic distress. While Tesla may offer luxury EVs, abandoning its plan to enter the mid-range category, it appears that Elon Musk managed to fine-tune Tesla's elite brand to absorb negative pressures.
About the author: Shane Neagle is Editor In Chief at The Tokenist.
The clean energy car manufacturer’s stock market value has soared throughout 2020 and 2021 as investors bet on accelerating sales of electric cars in a global push towards increased sustainability amid the climate crisis. By 2030, the UK government plans to ban the production of petrol and diesel cars to meet national climate targets.
On Monday, Tesla shares increased by as much as 9% to as high as $998 following the announcement of Hertz’s 100,000 vehicle order. The shares later returned to below this level. Nonetheless, it marks a major milestone for Elon Musk’s company.
The milestone follows a record quarter for Tesla in which its Model 3 became Europe’s best selling car in September. This was the first time a battery electric vehicle topped the monthly sales chart in the continent.
Hertz has said that the vehicles would be delivered by the end of 2022 as part of its goal to build the largest EV rental fleet in the United States. It is understood that the purchase could cost as much as $4 billion, even with a bulk discount.
The rise in Tesla’s share price has further boosted the fortunes of its founder and CEO. Even before Monday’s gains, Musk’s gains stood well above the $250 billion mark.
On Wednesday, Sunak is also expected to announce plans to attract highly skilled workers from abroad and amend regulations to make it easier for international companies to relocate to Britain.
International companies with strategically important investment proposals can expect to receive grants towards their schemes under the government’s plans, provided they pass an assessment to ensure they provide value for the UK taxpayer.
“We want to make the UK the best place in the world to start, grow and invest in a business, as we continue to support enterprise, create jobs, and level up as we recover from the pandemic,” Sunak said.
Last week, the government hosted 200 business leaders at a global investment summit in London. The summit included a dinner with Prime Minister Boris Johnson for the world’s top business leaders and a reception at Windsor Castle with the Queen as the country attempted to impress multinational companies.
Last week, Pod Point announced it is looking at a premium listing with a free float of 25% minimum. It is expected that the float will raise approximately £120 million, with the offer comprising the sale of new shares in addition to some by existing shareholders such as Legal and General Capital Investments. EDF, which owns a 78% stake in the company, will keep a holding of over 50% while Legal and General will maintain only a minority shareholding.
Barclays Bank and Bank of America will stand as joint global coordinators, and as joint bookrunners along with Numis Securities.
Pod Point, established in 2009, is currently the UK’s largest provider of home charging points for electric vehicles and the second largest of charging for workplaces. The company predicts that by 2040, 25 million electric vehicle charging stations will be needed across the country.
Prior, Bezos had been the richest person in the world since 2017. On Thursday, Tesla’s share price increased, pushing Musk above the mark. The occasion also marks the quickest rise to the wealthiest person list in history.
Musk addressed his bump to the richest person in the world on Twitter, saying, “How strange” and “Well, back to work.”
Tesla has had its share of ups and downs. Just a year and a half ago, Tesla made headlines because of its rapid cash burn. However, over the past year, Tesla’s share price has rocketed, increasing ninefold. In just one year, Musk gained more wealth than Bill Gates’ entire net worth.
Musk remains one of the few who profited greatly during the pandemic. According to the Institute for Policy Studies, Musk made more than $48 billion between March 18 and August 13, while other auto manufacturers struggled. By July, he became the seventh richest person in the world, passing Warren Buffet.
At the beginning of 2020, Musk was worth just $27 billion and hovered at the bottom of the top 50 rich list. In May last year, he admitted that he was so “cash poor” that he wanted to sell his possessions; he listed several of his mansions during this time.
Musk also became the richest person in the world without taking a salary for the majority of his career; he has historically refused his $56,000 minimum salary every year. Furthemore, in January 2018 the company announced it would prohibit Musk from receiving any bonuses, salary, or stock until Tesla reached its $100 billion market cap. To date, the market cap has reached $760 billion.
Although Musk wasn’t taking a salary, he had generous options as a part of his pay package, including the ability to purchase more than 33 million shares of Tesla, which reached $818 per share on Thursday (compared to its market price of $98 a year ago) and sits just over $860 today.
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While Musk has his net worth tied up in several projects, there are many reasons why Tesla remains his most profitable venture. Dominating the electric car market, this sleek luxury sedan has plenty to offer, receiving nearly a perfect score from Consumer Reports and a five-star rating from Car & Driver. Some of its unique features include a biodefence mode (which renders the interior air quality of a vehicle “hospital grade”), a 5,000-pound towing grade, a central portrait touchscreen, front trunks, and more.
With so many features, protecting the vehicle from an investment standpoint is also important. For instance, many car owners opt to extend their manufacturer warranties to ensure their vehicle is covered for any damages beyond its expiration period. Owners of the Model S and Model X receive automatic extended coverage.
However, not all manufacturers are as generous with their policies. Other vehicle owners should work with warranties that align with their specific vehicle type, leveraging third-party companies for premium coverage. For example, a Volt owner might consider a Chevrolet extended warranty.
The Bloomberg Billionaire index noted that Bezos would have remained the richest person in the world if he hadn’t transferred a quarter of his Amazon stake to his ex-wife, who donated more than $4 billion to help Americans struggling during the pandemic.
President Joe Biden was officially inaugurated on 20 January, offering a dramatically changed political outlook from the outgoing Trump administration. Equally significant, Biden enters office buoyed by a “blue wave” that has seen Democrats gain majority power in the Senate while retaining a majority in the House of Representatives, granting the party effective control of both the legislative branch and the presidency for the first time since 2011.
Though the new administration will be faced with numerous economic challenges, it will have the political clout to enact drastic policies to tackle them. What does this mean for investors on the hunt for prime stocks? What are safe bets, and what bubbles may soon burst?
Green Energy
“Build Back Better” has been a common slogan ever since the 2020 campaign, broadly summarising the new administration’s aim for the US economy. The Biden-Harris campaign website specifies the creation of “an equitable, clean energy future” as a key plank in this. With the spectre of climate change becoming an ever-greater threat to the global economy, we can expect to see a good deal of renewed attention given to green business.
Naturally, this is good news for companies with a focus on renewable energy. Investors may soon see positive movement in NextEra and other utilities with wind and solar assets. Clean energy system manufacturers such as First Solar and Emphase Energy are also worth a look – as are electric vehicles companies. With Biden having voiced ambitions of creating 1 million jobs in the auto sector and incentivise EV production, the future looks bright for the likes of Tesla and Workhorse Group.
Infrastructure
Alongside Biden’s promises of greater green energy investment is a pledge to invest comprehensively in American infrastructure. Roads, bridges and energy grids are all noted as areas of concern that will soon see government investment.
With the spectre of climate change becoming an ever-greater threat to the global economy, we can expect to see a good deal of renewed attention given to green business.
A natural beneficiary of this focus on infrastructure (if Biden is serious) would be construction companies like building materials supplier Martin Marietta and equipment maker Caterpillar, both of which were heavily impacted by the onset of the COVID-19 pandemic but have since rebounded. It’s a telling portent that the Global X US Infrastructure Development ETF (PAVE), which tracks some of the largest industrial, construction and transportation companies in the US, saw a rally in the week of the election and an overall jump of 26% in the past three months.
While the optimistic rumours of a big infrastructure deal may not come to anything under the new government, telecom providers in particular can expect a boost from Biden’s promise to work towards universal broadband. AT&T, Comcast and Verizon, among other big players, can be expected to make significant gains.
Big Tech
Tech giants like Amazon, Google and Facebook occupy a strange position in the US economy. Though their market values have never been higher, and they have managed to keep up consistently high performance during the COVID-19 pandemic while other businesses have foundered, politicians from both sides of the aisle have managed to find an opponent in big tech.
Now, with majority power in Congress, Biden and his party are in a position to heavily regulate or even break up the “Big Five” of Amazon, Apple, Facebook, Microsoft and Alphabet. Notable Democrats like Elizabeth Warren have come out in support of breaking up tech giants; the Democrat-led House antitrust committee has found that the Big Five “hold monopoly power”. Biden himself has publicly criticised Facebook for providing a platform for his predecessor to “spread fear and misleading information”, though he has stopped short of recommending its breakup.
With tech companies enjoying more influence than ever before, it remains to be seen just how far the new administration will go to curb their power. The September and November tech selloffs have shown that the Big Five’s stock is not invincible; 2021 may see the end of tech giants as a sure bet for investment.
Though their market values have never been higher, and they have managed to keep up consistently high performance during the COVID-19 pandemic while other businesses have foundered, politicians from both sides of the aisle have managed to find an opponent in big tech.
Cannabis
Though not as high-profile an issue as climate change, the debate surrounding the regulation of cannabis played a role in the outcome of the presidential election and will likely have consequences for the markets. Biden’s campaign platform included the decriminalisation of cannabis at the federal level, which – while not the same as outright legalising the drug – would pave the way for long-awaited cannabis banking reform and greater acceptance of the substance’s recreational use over time.
Several other Democrat leaders, including New York governor Andrew Cuomo, have vocally supported the legalisation of cannabis, as have 66% of Americans, which bodes well for the future of the industry. Worldwide cannabis sales tripled to almost $11 billion from 2014 to 2018; Wall Street analysts predict that figure could land anywhere between $50 billion and $200 billion a year by 2030. In the shorter term, investors may want to keep a close eye on Canadian cannabis producers such as Organigram Holdings or Harvest Health & Recreation Inc – or Tilray, which managed to double its value in January alone.
More Broadly
One of the final sectors that is sure to see movement in the Biden era is healthcare. Looking past the headline-making pharmaceutical companies producing COVID-19 vaccines, and the fact that Biden has not embraced “Medicare for all” like many of his fellow Democrats, the health industry will undoubtedly be boosted in at least some areas by the new president’s policies. Biden has promised an option “like Medicare” for individual health plans, a boon for existing Medicare supplemental plan providers like UnitedHealth Group. As many as 23 million Americans could be made eligible for Medicare under Biden’s policies, which is sure to elevate healthcare fortunes.
And to move back from specific industries, there is reason for investors across the board to take note of the incoming administration’s policies. Biden has stated his intention to raise the corporate tax rate back to its pre-Trump level of 28% and to tax foreign income more aggressively, which obviously bodes poorly for the stock market. But before that can occur, a $1.9 trillion COVID-19 stimulus package is sitting on the table, sure to lift US markets broadly should it pass Congress.
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This stimulus package and the measures that may follow it, with a second spending plan slated to arrive “in the first few weeks” of Biden’s term, should give traders plenty to be optimistic about in the short term. Whether the specific industries listed above ultimately see their fortunes raised will depend on negotiations in government and the evolution of external factors like the ongoing pandemic, but prospective investors would do well to plan for the new president’s policy objectives in the years ahead.
Elon Musk’s Tesla on Monday will become the most highly valued company ever admitted to the S&P 500, with a market cap that will account for over 1% of the entire index.
Its 21 December listing is predicted to trigger a rush of stock trading on Friday as index-trading funds acquire shares so their portfolios will correctly reflect the S&P 500. $80 billion of the company’s stock is expected to change hands by the end of Friday’s session.
In addition to acquiring Tesla shares, funds mapping onto the index will simultaneously be forced to sell shares in other S&P 500 constituents worth the same amount.
Actively managed funds that use the S&P 500 as a benchmark for their performance, many of which have thus far shied away from investing in Tesla for fear that it has become , will have to decide whether they will risk buying its stock.
Shares in Tesla have risen by almost 700% in the past year, ranking it as the sixth most valuable publicly listed US company with a stock market value of over $600 billion. Stocks hit all-time highs on Thursday at $655.90 per share.
Tesla’s unprecedented stock surge in 2020 has pushed founder and CEO Elon Musk’s total net worth to more than $150 billion, cementing him as the world’s second-richest person ahead of former Microsoft CEO Bill Gates. Despite its current market value, Tesla has only turned a profit for five consecutive quarters, and recently completed a $5 billion equity sale to capitalise on its explosive growth.
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A study by Invezz found that Tesla shares were the most popular stock to invest in for Europeans in 2020. The company was the most commonly searched-for stock in 26 of 31 European countries analysed.
Karoline Gore explores the current state of the EV market and the trends that have sparked its rise – and what this may portend for automated vehicles too.
The electric vehicle (EV) market is one that has an absolutely undeniable place in the future, but investment markets haven’t reflected that in value. According to experts providing comment in USA Today, Tesla saw a bear market in the early part of 2020, before striking upwards into their now sky-high value. A few key events have led to this surge, but they’ve now successfully started a trend. For a few key reasons, EVs have now established themselves as a bull market that will continue to rise – and big names are showing the way.
Big companies buy in
Tesla and their associated manufacturers are, of course, big names, but they lack a little bit of credibility as compared to the old-school big American auto houses. While EVs have an unassailable status as the future of the automotive market, it’s been a slow process to get these older manufacturers onboard. This has changed with the huge market intervention of GM, who have recently put $2 billion into EV production to up their share of the market. This has led to news outlets, including CNN, advocating an investment portfolio that looks into companies like GM – a sharp change from recent months; March saw their stock drop to a low not seen since before 2012. This type of disruption from the institutional auto manufacturers of the USA indicates the upwards trend and interest in the market; something which should only continue to become more relevant in a geopolitical sense.
Geopolitical movement
The Trump administration has been broadly opposed to green measures, whereas a Biden government has promised to become more climate-positive. Whatever the ultimate outcome of the election, there are indications that public opinion will keep moving forward in favour of green measures. According to the BBC, areas of industry and energy production have continued to grow where they favour green measures, and shrink in areas where they rely on fossil fuels and processes harmful to the environment. This points towards a future where society is dictating what products they want, and that’s a good one for EVs – especially when considering their logical, efficient endpoint.
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The automated revolution
EVs will ultimately give way to automated vehicles. There are already plenty of models on the market that achieve 1 and 2 stage automation, meaning that the driver still has most control, with stage 3 being absolute control by the computer of the vehicle. This is the logical place where EVs will move to in the future, and offers huge benefits for business. Businesses as huge as Walmart have already invested heavily in the technology, given the benefits it can bring to the bottom line. As a result, automation can only grow, and putting money into the industry will only yield returns as the years go on.
For that reason, this form of investing favours a long-term view. That being said, it’s a good time to start getting involved – before huge gains are made by the big auto houses and the industry is swamped.
It would seem that the dawn of the electric car is finally upon us, with the Tesla Model 3 recording the third biggest number of UK registrations in August.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that the model muscled its way into the top 3 with 2,082 units registered in that month.
Well, it’s fair to say that more than a pinch of salt is required when assessing the reasons behind such a sudden ascent.
On the face of it, the model’s growing popularity surpassed that of household models including the Ford Focus, the Vauxhall Corsa and the Mercedes-Benz A-Class, with only the Ford Fiesta and the Volkswagen Golf having more registrations in the month.
For a car that only began production in 2017, it’s an impressive effort. Furthermore, it would seem that the rise of the Model 3 has had an impressive impact on EV registrations overall, with sales of battery electric cars almost doubling year on year in the 12 months to August, from 9,000 in 2018 to 17,393 this year.
So, has the electric dream finally been realised and should you now be considering EVs for your next car? Have you got that salt handy?
As ever, it’s all about context. The current trials and tribulations faced by the motor sector have been well documented and it’s perhaps here where the real reasons for the Model 3’s impressive August SMMT figures lie.
The numbers show that the market as a whole saw new registrations dip by 1.6% to 92,573 in August. However, the context to bear in mind here is that August is traditionally a quiet month for registrations as the market’s emphasis shifts to the new September number plate. However, that doesn’t account for the 1,500 fewer registrations in August compared to the same month last year.
So how is Tesla bucking the trend? Has the EV manufacturer weathered the choppy seas of negative PR, only to be welcomed onto dry land to a cacophony of positive headlines?
Not quite. Those journalists perceptive enough to understand how registrations work and the delays that have dogged the production of the Tesla Model 3 have a slightly different take.
The model is perhaps making up for lost time. James Baggot, founder of Car Dealer Magazine, put it best when he said: “It’s worth noting that the SMMT registration figures relate to cars registered, not sold, in the month. Most Tesla Model 3 buyers put down their deposits years ago, so this is simply Tesla finally delivering a car they promised back in 2016.
“This was effectively the first full month of deliveries for the Model 3 in the UK. It has also caused an abnormal blip in the SMMT stats – electric cars are up considerably, but it’s unlikely to be something that will continue.”
So, with current market conditions perhaps flattering the Model 3’s perceived popularity in August, we may have to wait a little longer until the electric revolution is truly upon us. And, of-course, while pure-electric sales are on the up, they only represent a tiny 1.1% minority of annual car sales.
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However, it can be said that the industry has made huge strides in 2019. Car makers are now beginning to catch up as the pressure to move away from fossil fuels continues to mount, suggesting that prices for electric cars could also begin to fall.
Jaguar’s I-Pace sports utility vehicle won the world car of the year award this year, Nissan is finally beginning to talk about its new EV cross-over following the huge success of the Leaf, BMW has high hopes for its new electric Mini, while Volkswagen has been spotted testing its all-electric ID 4 SUV, one of the first EV’s in its much talked about ID series.
With Government emission targets not going away, the pressure on the industry remains. It will be interesting to see whether Tesla can stay in the headlines, for the right reasons.
