What happened
Shares of electric car maker Tesla (TSLA +2.40%) have been on a tear recently. The stock broke out into new all-time highs last week and has risen even more this week.
The growth stock's gain on Wednesday likely reflects continued momentum in the share price, as well as upbeat commentary from Wedbush analyst Daniel Ives about Tesla's potential for more bulk orders for Tesla vehicles, like the one rental-car specialist Hertz (HTZG.Q +0.00%) recently made.
Tesla shares were up 3.5% as of 12:30 p.m. EDT on Wednesday.
Image source: Getty Images.
So what
On Wednesday morning, ridesharing company Uber Technologies (UBER +8.64%) announced a partnership with Hertz to offer 50,000 Tesla vehicles for rent to its drivers. This built on Hertz's announcement earlier this week that it was ordering 100,000 Tesla vehicles by the end of next year.
Ives not only thinks there will be more bulk orders like this to come, but also believes these bulk orders foreshadow the eventual launch of the robotaxi network that Tesla has been working toward. In addition, the analyst noted that a shift in consumer preference toward electric vehicles when renting a car could significantly increase Tesla's addressable market.
Now what
While Ives brings up good reasons for demand for Tesla vehicles to continue growing, order volume isn't necessarily a problem for the company. After all, shipments of new orders of Tesla vehicles are already backlogged. Looking ahead, investors will want to look for Tesla to continue investing as aggressively as possible in manufacturing expansion so it can fully capitalize on what appears to be a tipping point in the demand for electric cars.
