On Tuesday, Tesla Inc. (NASDAQ:TSLA) shares edged slightly higher to trade at $733 per share after the company received Indian approval to sell electric vehicles (EVs) in the country.
India’s Ministry of Road Transport and Highways website suggested in a post four Tesla EV models had received approval after tests matched requirements for safety, emissions, and roadworthiness.
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However, the electric vehicles manufacturer still faces an uphill task in the Indian market because of the low rate of EVs adoption and highly competitive pricing for local models. Moreover, a lack of tax cuts has slowed the rate of adoption of EVs in the country.
Should you buy or sell Tesla shares amid EV progress in India?
Although Tesla still has a long way to go before significantly penetrating the Indian market, the company seems to be making progress after the latest approval. Moreover, India could be a gateway to the southeast Asian market if Tesla manages to set up a manufacturing plant.
From a valuation perspective, Tesla shares trade at a steep P/E ratio of 382.28, while its forward P/E of 104.93 also seems too high for value investors.
However, analysts expect Tesla’s earnings per share to grow by a whopping 165% this year and at an average annual rate of about 51% over the next five years, making it a perfect stock for growth investors.
As a result, given this year’s gains of just 0.46%, Tesla shares could extend Tuesday’s slight gains amid increased market optimism.
There is room left for more upward movement
Technically, Tesla shares seem to be trading within an ascending channel formation in the intraday chart. However, the stock price is yet to hit overbought conditions in the 14-day RSI, leaving room for more upward movement.
Therefore, investors can target extended gains at about $781.37 or higher at $843.11. On the other hand, should the stock pullback upon hitting overbought conditions, it could find support at $682.28 or lower at $620.18.
Bottom line: Why buy Tesla’s exciting growth story?
The electric vehicles market is one of the most exciting places to invest, as shown by more gasoline vehicle manufacturers launching their own EVs. Therefore, the long-term growth of the industry is a compelling catalyst for investors.
Tesla seems well poised with its plans to penetrate the Indian market, which is the world’s second-most populous nation. And after receiving approval to commercially enter the market, things could get more exciting in the coming years.
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