The recent rally in Tesla’s TSLA share price is breathtaking. The electric vehicle (EV) pioneer hit a fresh 52-week high of $385.50 yesterday, before closing the session at $378.99. Notably, on Monday, the company was the best performer on the Nasdaq 100, closing the trading session at $381.50.On a further encouraging note, Tesla has had a remarkable run on the bourses over the past three months, with its stock price surging 53.6%, outperforming the sector and S&P 500 Index’s growth of 9.8% and 6.4%, respectively.

The rally was already developing when Tesla turned in a blowout Q3 earnings report in October. Expected to post a modest loss of $0.15 per share for the quarter, Tesla instead posted a positive net of $1.86/share on $6.3B in revenues.The company reported capital expenditures of $385 million during the quarter, down from $510 million in third-quarter 2018. Free cash flow was $371 million and cash and cash equivalents on its balance sheet grew to $5.3 billion, largely extinguishing fears that the company would have to tap the debt markets at unfavorable rates or engage in a dilutive equity offering to raise cash to fund near-term operations.

Apart from impressive third-quarter numbers, a lot more seems to be going in favor of Tesla and its charismatic CEO Elon Musk.

Key Catalysts Driving Tesla’s Rally

Model 3 Success: With Model 3 sedan being its flagship vehicle, Tesla has established itself as a leader in the EV segment.Being the first mass-market electric car in North America and Europe, Model 3 is one of the best-selling vehicles. The car’s market-leading safety, performance and impressive specs make it a huge success. Rising deliveries for Model 3, which forms a major chunk of the automaker’s overall deliveries, are aiding the company’s prospects. The firm expects overall deliveries for full-year 2019 within 360,000 units, indicating a year-over-year increase of more than 50%. Tesla also anticipates order backlog to increase to 105,000 vehicles in the fourth quarter, which should enable it to pull off Musk’s ambitious delivery target for 2019.

Shanghai Gigafactory Progress: Gigafactory 3 in Shanghai is ahead of schedule with cars appearing to be already out for delivery. This is another example of Tesla management hitting 2019 goals, once again surprising investors. The Gigafactory 3 in Shanghai will give the company access to the largest EV market on the planet. It will help Tesla to bypass tariffs and cut costs substantially.In phase 1, the firm intends to produce 250,000 annually in Gigafactory 3 and eventually reach a capacity of 500,000 units. Tesla also intends to carry out after-sales network expansion in China by opening new repair and maintenance shops, along with charging stations in the country.

Cybertruck’s Craze: While critics had a field day when they first saw the vehicle, they were quickly silenced by around 250,000 preorders for the truck during the first weekend after the unveiling event, 41% of which were for the high end tri-motor variant that’s expected to sell for almost $70K. The more basic single-motor rear-wheel drive truck’s starting price is $39,000 and is expected to be on the streets by 2021.

Model Y & Gigafactory 4 Plans: Model Y, whose production is slated for 2020, is expected to be a big hit. Tesla’s long-awaited Model Y crossover is ahead of schedule and is expected to be launched by next summer. Last month, the company made a bold and smart decision to choose Germany for building its fourth Gigafactory. The plant would build batteries, power trains and vehicles, starting with the Model Y sports utility vehicle. Car production in the Berlin Gigafactory is expected to begin in late 2021.

Bull Run Likely to Sustain

While the EV revolution is gathering steam, with a number of auto biggies like Volkswagen VWAGY, BMW AG BAMXF and Nissan Motor NSANY, among others, coming up with green vehicles, Tesla’s Model 3 has a better overall package. It is in a class of its own with superior features, advanced technologies, and speed and safety advantages compared with other brands. While Volkswagen’s VW ID.3 seems to be a solid offering coming in 2020, which will give modest competition to Tesla’s Model 3, it doesn’t check all of the boxes.

Shanghai and Berlin Gigafactory further demonstrate Tesla’s EV world dominance plans. The firm’s focus on expansion of product portfolio, introduction of car-sharing services and development of self-driving capability is commendable, and is likely to drive Tesla further.

Since the third-quarter report, the consensus estimate for the fourth quarter has increased from 62 cents to $1.23/share and 2020 estimates have moved north from $4.90 to $5.73/share. The firm expects year-over-year growth of 1245.4% in 2020 earnings.

Wrapping Up

Impressive sales of existing products, aggressive expansion efforts that will allow the company to manufacture and sell autos and batteries in Europe and Asia, and exciting future products have made Tesla one of the hottest stocks of 2019, with share price nearly doubling since the beginning of June.

The company is finally meeting management’s highly ambitious goals. Considering the tailwinds, the stock still has plenty of upside potential left. It appears that other aspirants in the electric auto market are going to have to keep chasing Tesla for the foreseeable future.

So, those who don’t already own the stock, there’s still time to snap up Tesla — which currently holds a Zacks Rank #2 (Buy) — as we expect it to hit many more 52-week highs going forward. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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