What Are The Keys To Tesla’s 224% ROI Stock Record?

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What Are The Keys To Tesla’s 224% ROI Stock Record?
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Despite “overvalue” claims by analysts at some point, Tesla (NASDAQ:TSLA) was the big surprise stock in 2020 after recording a record high growth. According to data obtained by Finbold, Tesla stock surpassed that of some of its toughest rivals between June 2020 and June 2021, with an ROI of 224.93%.

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Q1 2021 hedge fund letters, conferences and more

The outstanding growth last year has been critical, as investors were met with such positive ROI despite the 2021 correction.

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In the realm of car industry stocks, Tesla is second to Chinese manufacturer NIO, which reported nearly double returns at 539.13%, while Ford Motor sits third with 152.28% returns, on top of General Motors at 141.08%. With 116.62%, Volkswagen AG closes the top five.

According to a Finbold press release, Tesla retained a greater stock price during the same period, topping $623.71 in 2021 from $191.95 in 2020. “Elsewhere, last year, NIO’s stock price was at $6.9, while in June 2021, the stock stood at $44.1.”

Inclusion to the S&P 500 index and the Model Y compact SUV played a role

Through the last year, Tesla’s stock performance has been like a rollercoaster, reaching record peaks amid the pandemic and plummeting once the global economy started bouncing back from the crunch.

It is timely to underline that the massive gains were sufficient to maintain a high ROI in the wake of the global fall and the current correction.

Still, there is a series of factors that have driven Tesla’s stock growth, such as the inclusion to the S&P 500 index, and the growing retail investor interest in the stock. However, the increase in production and the presentation of its Model Y compact SUV, also cemented the company as the ultimate EV frontrunner.

Consumer EV adoption continues to rise

Despite NIO’s dealings in the Asian region, Tesla knew how to capitalize on the profitable Chinese EV market during its recovery by activating production at the Shanghai facility in late 2019. It did not come without some worries, though, as in April, the company sold 25,846 EVs in China compared to 35,478 in March, reporting a decline in sales of 27.1%.

Still, Tesla’s Cybertruck model was also met with great success with pre-orders topping 1.08 million units a month later. This accounts for more than the actual 866,750 total vehicles that Tesla delivered in the course of two years, between 2019 and 2020.

With such pre-order numbers, and to build upon the outstanding stock performance, it is critical that the company's delivers stay on target.

Despite some on-the-road incidents that have rocked the company’s reputation, Tesla has also strived for improving the algorithm and battery safety systems in its products, with a positive impact on its stock.

As consumer adoption for electric vehicles grows under tax bonuses and more stringent climate change regulation, investors have set their sights on Tesla, betting in its favor. Should Elon Musk’s endeavor continue in the right direction, more stock success is just around the corner.

Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.

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