From Nasdaq:

Tesla (NASDAQ: TSLA) had a record year in 2023 for electric vehicle (EV) production and deliveries. However, its stock still trades 39% below its all-time high. The company lost its position as the world’s largest EV company by sales, and its profit margin shrunk due to a price war and rising competition. Despite these challenges, Tesla delivered a record 1.8 million cars in 2023, and they have other technologies in development for future growth.

The U.S. Federal Reserve raised interest rates from March 2022 to August 2023 to combat inflation, leading consumers to tighten their belts. Tesla faced economic challenges and increasing competition, leading them to slash vehicle prices by 20% to meet sales targets. While this helped stimulate demand, it also affected the company’s profit margin.

Elon Musk has ambitious growth targets for Tesla, aiming to increase production by 50% annually and operate 12 gigafactories by 2030. However, Tesla’s delivery growth is unlikely to meet this target, and the company’s earnings per share have been impacted by price cuts. Wall Street believes Tesla’s earnings will return to growth in 2024, but the stock’s high price-to-earnings (P/E) ratio could be a concern.

Tesla is a leading developer of fully autonomous self-driving software, which could be a game changer for its economics. Musk plans to sell the software on a subscription basis and license it to other automakers, in addition to launching an autonomous ride-hailing network and a purpose-made autonomous robotaxi vehicle. This strategy could potentially propel Tesla’s share price to significant growth in the future.

While Tesla stock may be expensive by traditional metrics, investors with a time horizon of 10 years or more could eventually see substantial returns. However, buying Tesla stock today might not be the right move for short-term investors. Overall, despite current challenges, Tesla is working on innovative technologies that could drive future growth and investment potential.



Read more: Tesla Just Delivered a Record Number of Electric Vehicles, but That Isn’t the Best Reason to Buy the Stock