UAW Strike: Windfall Victory for Tesla?
Earlier in the week, Tesla (TSLA) announced record deliveries for the third quarter.
Though Tesla’s stock is having a muted price reaction thus far this week, it is imperative that investors do not take these robust growth numbers for granted. The EV-maker remains the king of the growing clean energy market and is clearly in its exponential growth phase.
Exhibit A: Below is a history of Tesla deliveries in the third quarter:
Q3 2023: 435,059
Q3 2022: 343,830
Q3 2021: 241,391
Q3 2020: 139,300
Q3 2019: 97,000
Q3 2018: 83,500
Q3 2017: 26,150
Q3 2016: 24,500
Q3 2015: 11,580
Q3 2014: 7,785
Q3 2013: 5,500
Q3 2012: 321
Q3 2011: 0
UAW Strike is a Windfall Opportunity for Tesla
Not only is Tesla firing on all cylinders, but its competition (The Big 3 Automakers, General Motors (GM), Stellantis (STLA), & Ford (F)) are also running into significant issues due to the current negotiation stalemate with the UAW strike. Regardless of whether a deal is struck between the automakers and the union, the end result is a win for Tesla. Either “The Big 3’s” costs skyrocket while its employees work fewer hours, or no deal is reached. In recent comments, Tesla CEO Elon Musk opined on the matter, saying, “UAW demands will bankrupt automakers in the fast lane.”
Tuesday, Tesla displayed relative strength versus other growth stocks and the tech market in general.
Price Cuts are Sparking Demand
Beyond the mess of negotiations between the UAW and “The Big 3”, Tesla is enjoying the benefits of its industry’s best pricing power. Government subsidies, business efficiency, and low costs allow Tesla to have the most competitive prices in the industry. While revenue per car is decreasing, the number of EVs Tesla is selling outweighs the damage.
Image Source: Zacks Investment Research
Fundamentals & Stock Price Near Major Breakout Zone
For investors, one of the best signs you’re on the right track with a stock selection occurs when the fundamentals and technicals work in concert. TSLA is threatening a long-term breakout from both perspectives.
Image Source: Zacks Investment Research
Bottom Line
Before the UAW strike, Tesla was already the undisputed leader in the EV space. However, regardless of the outcome, the strike is a windfall victory for the already dominant EV-maker.
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