The Tesla Stock Price Just Received This Major Catalyst for 2016

The Tesla stock price climbed 1.68% in intraday trading today (Tuesday) after The Wall Street Journal reported Tesla is looking to hire thousands of employees over the next several years.

Money Morning has been bullish on Tesla stock throughout 2015, and this hiring spree will be another catalyst for the Tesla stock price as we head into 2016...tesla stock price

CEO Elon Musk tweeted on Nov. 19 that he was looking for "hardcore software engineers" to work on the Autopilot software team at Tesla Motors Inc. (Nasdaq: TSLA). According to The Journal, Musk was planning on hiring just 100 applicants at the time, although his inbox was flooded with applications.

Musk will need to hold on to those applications. Over the next four years, Tesla's CEO plans to hire over 4,500 workers in California alone.

You see, Tesla faces more pressure than ever to find and retain top talent in the autonomous vehicle industry.

Apple Inc. (Nasdaq: AAPL) and Alphabet Inc. (Nasdaq: GOOG, GOOGL) are both working on their own autonomous vehicles, and more traditional car manufacturers like Ford Motor Co. (NYSE: F) and Toyota Motor Corp. (NYSE ADR: TM) are also entering the field.

According to Fortune, Toyota plans to build an autonomous vehicle by 2020.

And not only will the increased workforce keep Tesla ahead of the competition when it comes it autonomous vehicles, it also means Tesla can sell more of its Model S and Model X vehicles than ever before. By 2020, Pike Research expects annual worldwide sales of plug-in electric vehicles will reach 3.8 million. Tesla has sold just 22,100 Model S vehicles in 2015, so demand is expected to spike dramatically in the next five years.

While the projected hiring spree is moving the TSLA stock price today, there's a much bigger catalyst for the Tesla stock price heading into 2016...

The Model 3 Will Push the Tesla Stock Price in 2016

One of the biggest arguments for Tesla detractors is that the Model S has an MSRP of $69,000. But Musk has plans to make a vehicle that is much more affordable and has a much wider appeal.

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According to The Detroit News, Tesla will have a new vehicle debut in January 2016 at the Consumer Electronics Show in Las Vegas. Tesla's Model 3 will cost $35,000 and go into production in 2017.

The vehicle will be able to travel up to 200 miles without needing a charge. That range underperforms the Model S' average 265-mile range, but the Model 3 is roughly half the cost.

According to U.S. Today, the average car price in 2015 is $33,560. This means that consumers will be much more willing to pay for the Model 3, which is crucial for Tesla to increase its sales totals. And even though we're bullish on the Tesla stock price in 2016, TSLA will remain volatile...

On Nov. 20, Tesla announced it was recalling 90,000 Model S sedans because of seat belt issues. And on the same day of the recall, officials in Hong Kong declared Tesla's auto-driving feature illegal. According to a report from news outlet Quartz, Musk did not go through the city's regulatory process.

That news sent the Tesla stock price down 2.56% in the three following days.

Because the electric and autonomous vehicle field is still new, there are always chances for setbacks for Tesla. These potential setbacks mean Tesla stock is not for the short-term investor.

But Money Morning Chief Investment Strategist Keith Fitz-Gerald believes TSLA stock is great for the long term.

"I think Musk is the most innovative CEO on the planet and that he sees value others don't yet recognize," Fitz-Gerald stated. "Cars, batteries, innovative business models - nobody knows where it will go but ultimately if you're along for the ride, I think it'd be very hard to go wrong over time."

The Tesla stock price opened today at $229.55 and has climbed 0.48% in the last month. For the year, the Tesla stock price is up 4.64%. In the same time, the Dow Jones is down 0.6%.

The Bottom Line: It was reported today that Elon Musk is about to engage in a massive hiring spree that will increase the production of electric and autonomous vehicles in 2016 and beyond. And that will be a major catalyst for the Tesla stock price, which will continue to climb in 2016. With a more affordable electric vehicle scheduled for production in 2017, Tesla is adding to its position as the biggest innovator in the electric car space.

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