Why Tesla’s Stock Rallied On Monday

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Tesla (NYSE:TSLA) stock rose by almost 6% on Monday, closing at about $364. While this was partly driven by a rally in the broader markets, with the S&P 500 up by over 1%, there were a few company-specific factors that were responsible as well, which we discuss below.

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We have $205 per share price estimate for Tesla, which is well below the current market price. Read our current stance on Tesla here.

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Tesla’s Expands Supercharging To Cities

Firstly, Tesla announced that it was expanding its Supercharger network into city centers, making it easier for people without immediate access to home or workplace charging to own a Tesla. The company intends to start the program in downtown Chicago and Boston, with locations including supermarkets, shopping centers, and downtown districts. Tesla noted that it has redesigned its charger posts to make them more space efficient, while providing dedicated power to each car, allowing for more consistent charging times. The move could help boost Tesla’s addressable market in affluent urban areas where owners may not have the infrastructure to charge at home.

Developments Related To Tesla’s Autopilot Crash

The family of a man killed in May 2016 while driving a Tesla Model S on Autopilot mode released a statement saying that they do not believe that the car or its technology was responsible for his death. This could be viewed as a positive development for Tesla, as Autopilot technology is seen as a major differentiating factor for the company’s vehicles. That said, the National Transportation Safety Board is set to meet on Tuesday to issue its final findings on the crash, and Bloomberg is reporting that Tesla’s self-driving system could share blame for the crash.

Separately, Tesla received some positive press after it released a software update that increased the range of its vehicles that were in areas affected by Hurricane Irma. While Tesla requires owners of certain models of its cars (with software-limited batteries) to purchase the full range of their batteries as an additional option, the company temporarily unlocked the full range as a goodwill gesture, to allow customers to evacuate ahead of the storm. This likely had less of an impact on the company’s stock, but certainly contributed to the positive sentiment.

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