Tesla (Nasdaq: TSLA) Stock Gets Great News from BMW Deal

Tesla Motors Inc. (Nasdaq: TSLA) stock was up 1.1% in early trading today (Monday), after CEO Elon Musk said the company is discussing a partnership with the German automaker BMW.

According to a report by the German outlet Der Spiegel, the collaboration would include the development of batteries and lightweight components.

TSLA stockSpecifically, "we are talking about whether we can collaborate in battery technology or charging stations," Musk told the German newspaper.

Musk also described BMW's parts strategy as "interesting" and "relatively cost efficient." BMW uses carbon fiber-reinforced parts in the body of its vehicles. The parts are used in BMW's i3 electric hatchback and its i8 plug-in hybrid sports car.

Neither automaker has provided further comment about the partnership. A Tesla spokeswoman in Germany simply told Reuters "the conversation between Elon Musk and BMW has been a casual conversation."

The move is consistent with Musk's approach to the electric-vehicle (EV) market. In June, Tesla and BMW discussed the possibility of designing universal charging stations. Those would power multiple brands of electric cars from the same port.

That same month, Musk opened up all of Tesla's charging patents to its competition. He reasoned that easier charging for customers would lift the entire market. The more popular electric vehicles become with consumers, the better Tesla Motors fares. And since we are still in the early stages of electric vehicle production, collaboration between major automakers is key.

TSLA stock liked today's news, initially moving up to $245.45. After several hours of trading, TSLA was hovering back near $243 per share.

It was a welcome bump for the stock. TSLA hit an all-time high of $291.42 on Sept. 4 and has underperformed since. In fact, TSLA stock has dipped 13.4% compared to gains of 4.3% for the Dow Jones Industrial Average and 3.3% for the S&P 500.

Looking forward, today's BMW report is good news for TSLA. It may not have had a huge impact on the TSLA stock price, but it reinforces Musk's long-term vision.

It also reinforces the long-term value Tesla stock will give investors...

How to Play TSLA Stock Now and in 2015

Tesla is one of the most volatile stocks on the market. That was on display today when it immediately jumped in early trading. Any hint of news is enough to send the stock up or down several percentage points.

For that reason, we advise against playing TSLA as a short-term stock. However, Money Morning experts view TSLA as a great long-term investment. Today's news is the perfect example why.

Elon Musk operates differently than the CEOs of other automakers. That's one of the company's biggest strengths.

"You hardly ever see this recognized in the mainstream media, but Tesla has one irreplaceable asset that also happens to be its greatest advantage over its competitors," Money Morning's Chief Investment Strategist Keith Fitz-Gerald said. "The company has been blessed with the most innovative CEO on the planet: Elon Musk."

"Creativity as a thinker who can't be boxed in by entrenched competitors, the ability to cheerfully put tens of millions of his own money behind his vision when necessary, a solid grasp of what technology means for the industry he operates in... all of these are great qualities in a CEO. Any company, big or small, is lucky to have a chief executive with just two of them. Tesla has all three in Elon Musk."

Once again, Musk has demonstrated he has Tesla's future in mind. A partnership with BMW won't just help Tesla improve its vehicles in the short term. It will allow both companies to improve the global charging infrastructure for EVs.

The Bottom Line: TSLA stock remains an excellent long-term investment for those willing to take on some risk. And the recent dip the stock has taken since September means TSLA shares are trading at a discounted price.

More from Keith Fitz-Gerald: Keith recently made the rare move of releasing one of his subscriber stock recommendations to the public last week. But according to him, the profit opportunity from this discounted stock is too good not to share...

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