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Tesla shares: what to focus on ahead of Q1 results

What now for the Tesla share price after its volatile first quarter?

Tesla’s share price (NASDAQ: TSLA) has had a bumpy first quarter (Q1), dropping by around 40% from its early January high at $1,212.30 but rallying by around 65% from its $691.69 February low as CEO, Elon Musk opened his delayed €5 billion ‘Gigafactory’ near Berlin in March.

The plant was delayed by eight months after local authority licensing problems but now constitutes Tesla’s first European hub and represents the biggest investment in a German car plant in decades. At full capacity, the factory will produce half a million cars annually, more than the 450,000 electric vehicles that German rival Volkswagen sold globally in 2021. It will also produce batteries at an annual rate of 50 gigawatt hours (GWh), more than any other German plant.

Tesla has built millions of electric cars while rapidly bringing down production costs and in Saturday’s press release confirmed it had delivered over 310,000 vehicles, around 68% more than it delivered in Q1 of 2021. Despite another quarterly record, it still delivered 7,000 fewer cars than previously forecast.

The company nonetheless seems to be on track to release its full self-driving computer (FSD) which is supposed to be “10 times safer than manual via massive fleet learning and will enable your car to make money for you when you aren’t using it,” before year-end. With the production of the CyberTruck and Semi to begin next year, Tesla is well on its way to reach its 20 million vehicle target by 2030. Despite the company’s massive growth, the electric automaker currently accounts for around just 1% of the global vehicle market.

The limiting factor for Tesla, and forall electric car (EV) manufacturers for that matter, are the bottlenecks in the mining of EV-critical minerals and metals such as cobalt, lithium, palladium, platinum and nickel etc., all of which have become extremely expensive and have already led to price rises of Tesla cars in the US. China’s lockdown of the entire population of Shanghai, the busiest port in the world, global semiconductor hub and the location of the trillion-dollar trailblazer’s largest ‘Gigafactory’, has led to semiconductor and car production coming to a temporary halt.

Will the March rally in the Tesla share price resume after Q1 earnings?

Tesla’s share price ended its March surge higher at its early April $1,152.48 high with it then having fallen by around 15% to last week’s $962.20 low, above which it has been holding since.

While this continues to be the case, another up leg towards the November and January peaks at $1,212.30 to $1,247.34 may ensue in the weeks ahead.

First, though, last week’s high at $1,030,53 will need to be exceeded on a daily chart closing basis with the 8 April high at $1,078.55 representing another potential stumbling block for the bulls.

Failure at the current April low at $962.20 would most likely not only put the 55-day simple moving average (SMA) at $927.83 but also the December low, early March high and 200-day SMA at $892.07 to $886.25 on the map.

For more information on what to look for ahead of Tesla’s Q1 earnings please click here.

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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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