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Should I Invest in Tesla Stock?

Clean energy and electric vehicles are growing in popularity. When it comes to electric vehicles, Tesla is the household name changing the way people power their automobiles.

Tesla stock is expensive, but it continues to grow in value as more people and businesses choose electric cars and alternative energy sources.

Tesla, Inc.
company nameTesla, Inc.
sectorConsumer Cyclical
industryAuto Manufacturers
address3500 Deer Creek Road, Palo Alto, CA, United States
countryUnited States
websitehttp://www.tesla.com

Tesla, listed as TSLA in NASDAQ, has become a relatively stable stock, as more people show interest in electric vehicles and alternative energy in their homes and offices. The company regularly makes news as the CEO, Elon Musk, draws attention with his controversial and compelling social media posts. 

Despite Musk’s controversial and polarizing social media posts and interviews, his ideas about combating climate change and moving away from using fossil fuels can help the planet.

As more communities see the catastrophic effects of climate change, more people are buying into using alternative fuels, and Musk has visionary ideas that can change the world. 

So, is Tesla a good stock to invest in, considering its price and its founder’s personality? Let’s look closer at the company before making a decision.

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About Tesla

Tesla is a company that manufactures electric vehicles. Its subsidiary, Tesla Energy, manufactures solar roofs and solar panels. Tesla Energy also installs solar photovoltaic cells that it manufactures.

It also makes battery storage devices and accessories for Tesla vehicles.  

As of 2020, Tesla was the top seller of plug-in and battery electric vehicles. Tesla has stores and galleries in many of the 50 states and all Western European and East Asian countries.

The cars are also for sale in Australia. The company produced its one-millionth vehicle in 2020. 

While the company manufactures quality vehicles turning the automotive market on its head, the CEO creates controversies wherever he goes. Musk, one of the wealthiest people on the planet, has been repeatedly sued because of his business practices. 

Some of Tesla’s products have had dangerous technical problems, and the company has not resolved all of them. The company has also had issues with whistleblowers revealing violations of worker’s rights policies.

Bull Case

Tesla has several positive reasons that make it a good choice for investors looking to cash in on the popularity of alternative energy and electric vehicles. 

  • Tesla sells network services and insurance, which could create more profit per vehicle than the vehicles themselves. 
  • Tesla buyers who want more power under the hood can pay the company for faster acceleration. 
  • Tesla owners with older vehicles can pay the company for upgraded infotainment systems and self-driving capabilities. 
  • The company is considering offering subscription plans for battery charging while on the road. 
  • The company has a factory in China, where insiders expect the nation could account for 40% of demand in the next few years. 
  • The push for vehicles with lower emissions is driving up Tesla sales in Europe. 
  • Tesla is expecting to deliver 5 million cars annually by 2029. 
  • The Biden Administration’s agenda supporting tax credits for people who buy EVs could also drive growth in the United States. 
  • Tesla also involves itself in cryptocurrency and emissions credits. 

These factors show how electric vehicles, overseas investments, and government incentives are helping Tesla grow its revenues. The company is also modeling some of its new programs after Apple, with subscription services and paid upgrades. 

Tesla proved profitable in the first few months of 2021, but the profit was due to selling cryptocurrencies and emissions credits. Tesla’s differentiated portfolio keeps it profitable, showing that the company has a significant impact on global technology and carbon footprints.

Bear Case

While Tesla often sounds too good to pass up, not everyone finds the company worthy of their investment dollars. 

  • Tesla might be leading the way in manufacturing and selling electric vehicles, but most established automakers have EVs that will hit the market in the next 18 months. 
  • The proven success of global automakers like GM, Ford, and Chrysler could turn buyers away from Tesla simply because there are more dealerships, making their vehicles easier to purchase and service. 
  • With their factory in China producing the most popular models, a trade war between China and the United States could prove devastating for the automaker. 
  • Tesla has its own insurance company, but the insurance isn’t available in all 50 states. So, drivers still need to turn to established insurance companies to cover their vehicles. 
  • Tesla needs more factories and models to get to its goal of producing 5 million vehicles annually by 2029. 
  • Elon Musk continues to stir controversy and polarize the public. When he speaks, the market responds in all directions. 
  • The automotive industry relies on suppliers. When the suppliers cannot deliver, automakers cannot manufacture, making it difficult to reach sales goals. 
  • While the automaker prides itself on building vehicles with zero emissions, its cryptocurrency investment requires energy that isn’t as clean. The cryptocurrency market is volatile, which could affect Tesla’s bottom line. 

Tesla has several things going for it, but the burgeoning EV market, volatile cryptocurrency investments, and reliance on suppliers could negatively affect Tesla’s profitability. 

Tesla Competitors

FFord Motor Company
$12.99
SymbolF
Price$12.99
Change$0.3100
Change %2.44%
Volume$57,402,714.00
Marketcap51.89B
NNIO Inc.
$38.39
SymbolNIO
Price$38.39
Change$0.4100
Change %1.08%
Volume$38,112,729.00
Marketcap62.91B
GGeneral Motors Company
$50.82
SymbolGM
Price$50.82
Change$1.33
Change %2.69%
Volume$18,117,356.00
Marketcap73.78B
LLucid Group, Inc.
$20.06
SymbolLCID
Price$20.06
Change$0.1300
Change %0.65%
Volume$15,778,409.00
Marketcap32.47B
VVOLKSWAGEN AG
$232.00
SymbolVLKPF
Price$232.00
Change$2.00
Change %0.87%
Volume$878.00
Marketcap146.91B

Final Verdict

Tesla might seem like a sure thing, but what goes up can go down. All investments have risks, including companies like Tesla. The company has proven profitable, but not for its primary product - electric vehicles. 

The electric vehicle market continues to grow on the positive side, and Tesla is the most recognizable name in electric vehicles. With new factories and impressive goals, Tesla could be on the verge of explosive growth in Europe, China, and the United States. 

Tesla offers more to investors than electric vehicles. Its unique variety of services, from insurance and vehicle upgrades to solar panels and vehicle accessories, shows investors that the company works for them and the planet. 

Should you invest $1,000 in Tesla right now?

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