Tesla Stock Forecast: Why The Expansion To India Will Boost TSLA

“When something is important enough, you do it even if the odds are not in your favor.”
Elon Musk.


  • Tesla reported Q3, the first profitable quarter in two years
  • Elon Musk confirms that Tesla is going to enter the Indian market by 2019
  • I Know First has bullish forecast for TSLA on a 1-year perspective

Tesla Reports Q3 Results

On October 24th, Tesla Motors reported its third quarter results for 2018. It was a historic quarter for Tesla in various ways. The Model was the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume. The production has been increased drastically. The GAAP net income was $312 million, which makes the third quarter the first profitable quarter in two years. The free cash flow was $881million. Tesla held $3 billion in cash reserves, which increased by $731million compared to prior quarter. It seems that Tesla managed to get out of the crisis they were around one year ago. Critics were unsure if Tesla would manage to increase production. They also criticized that Tesla burns a lot of capital, and a capital increase is just a matter of time. Indeed, Tesla burned a lot of capital in the last few quarters, but it seems that they can do the turnaround. With the latest financial report, they showed a positive cash flow.

[Image Source: Marketscreener.com]

The total revenues compared to the prior quarter increased massively from $4 billion to $6.8 billion. Estimates of Market Screener estimate that Tesla in 2020 will have revenues of $34 billion and a net income of around $1.5 billion. If they achieve this, the value of the company will increase a lot. As a comparison, the largest car manufacturer Volkswagen, made revenues of around $230 billion in 2017, which is still significantly higher than the one of Tesla.
If you consider the financial ratios, Tesla also improved. The first time in two years they have a positive return on equity of 6%, whereas the prior quarter had a ROE of -19%. The current ratio, which measures the liquidity ratio, has also been improved from prior quarter from 0.73 to 0.81. Which marks a turnaround, as Tesla was losing a lot of its capital in previous years.

[Image Source: Theverge.com]

This third quarter Tesla managed to produce 53’000 Model 3 and seems to make the step into mass production. The graph below shows, how drastically Tesla increased its production since the launch of the Model 3 in the third quarter 2017. In the beginning of the year the situation looked totally different. Musk told Axios that the company came within a few weeks of going out of business: ‘faced a severe threat of death. Essentially, the company was bleeding money like crazy and just…we didn’t solve these problems in a very short period time, we would die. And it was extremely difficult to solve them.’ After being asked how close the company came to shut down Musk replied: ‘I would say within single-digit weeks.’ These words show how serious the situation for Tesla was. Since than a lot have changed, and it seems that Tesla managed to fulfill market expectations. Labor hours per Model 3 decreased by more than 30 % from Q2 to Q3. The US inventory at the end of Q3 remains the lowest in the industry when measured in terms of days sales, even compared to their own history the vehicle inventory level at the end of Q3 was the lowest in over two years. I consider this to be a good indicator that Tesla not only produces many cars, they also manage to deliver the product to the end customer. Tesla also decided to significantly increase the affordability of Model 3 by bringing portions of Model 3 production to China during 2019 and increase the level of localization through local sourcing and manufacturing. This will help Tesla to gradually reduce the average selling price and reach new customers. China remains the major challenge for the company, which still impose a 40% import duty for the Model S and X. Nevertheless, Tesla has good prospects for the future therefore remains a very innovative company.

[Data Source: Tesla.com]

Tesla Goes To India By 2019

[Image Source: thenewsminute.com]

Musk once said: Don’t be afraid of new arenas“. In a tweet on the November 2nd Elon Musk announced that Tesla is going to enter the Indian market: “Hopefully, partial presence in India, Africa & South America end of next year, with broader expansion in 2020”. If Tesla is going to enter the Indian market, it is likely to benefit from Indian government’s policies focusing on electric vehicles such as Adoption and Manufacture of Hybrid and Electric Vehicles (FAME). Tesla tried to enter India in 2017 but eventually did not due to some misunderstanding between the Government and the company. Elon Musk had said due to “some challenging government regulations, unfortunately”. Tesla and Elon Musk now plans to have a partial presence in India which means bringing and selling electric cars as CBU (Completely Built Units) and then taking up from there. The Indian government on many occasions have said about taking a strong stance on electric vehicles to reduce its oil import bills and the rising air pollution. The electric vehicle market in India is growing rapidly due to public authorities in India have made several electric vehicle-related policy announcements over the past few years showing strong commitment. For example, the Ministry of Power launched the new National Electric Mobility Programmed to focus on creating the charging infrastructure and a policy framework to set a target of more than 30% electric vehicles by 2030. By 2021 India is expected to emerge as the world’s third-largest passenger-vehicle market. This gives you a bare impression of the market potential, and why Tesla will enter the Indian market. Meanwhile, many companies have started setting up charging stations in their captive facilities or in public places. Tata Power has set up three fast charging electric vehicle stations at the Hyderabad campus of the information technology firm Cognizant. The move to enter the Indian market will boost the revenues of Tesla for years due to the improving friendly environment.


Tesla is the fastest growing car manufacturer in the world and has huge potential. The time of decreasing capital reserves and production problems is over, and Tesla is making the step into mass market. Once again, they proved every critic wrong. With entering the Indian market, they make a good move towards one of the largest economies in the future. The predicted revenues and net income also look promising. With all these positive aspects, Tesla stock is bullish. I Know First AI Predictive Algorithm’s forecast supports this estimation that the Tesla stock is bullish in a 1-month to 1-year perspective. In a one-year perspective Tesla is bullish with a predictability of 0.59 and a very high signal of 171.99. Many analysts share this view, as out of 22 analyst, 16 are either strong buy, buy or hold, which clearly supports the I Know First Predictive Algorithm.

[Image Source: Yahoo Finance.com]

How to interpret this diagram

Current I Know First subscribers received this bullish TSLA forecast on July 3, 2018.

Please note-for trading decisions use the most recent forecast.

Moreover, our I Know First Algorithm successfully forecasted the Tesla stock in the past. On July 3rd 2018 we can see how Tesla had a strong bullish signal of 95.65 and a good predictability of 0.62 for one year. After six month the stock rose already my 16.35%.


[Data Source: Yahoo Finance]

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