Tesla Stock ( NASDAQ:TSLA )
We are bullish on Tesla, Inc. ( NASDAQ:TSLA ) following strong Q4 2022 financial results. In the long run, Tesla has the most production capacity, the highest profit margins in the industry, the biggest share of the global market, cars that are priced competitively, and strong customer demand. The company has a large moat that, given how the industry works now, seems hard to get around. Tesla stock has already gained 63% year-to-date but is still down 36% over the past year.
In the short term, Tesla recently slashed the prices of its cars by a lot, which was a big blow to its competitors, who were starting to ramp up their production capacities. Since Tesla’s margins are higher than those of other EV manufacturers, the company can benefit from lower prices. Other EV manufacturers, on the other hand, may not be able to because their margins are low or even harmful.
Taking into account both supply and demand factors (such as the fact that Tesla expects to make between 1.8 million and 2 million cars in 2023 and that production is expected to grow at its Austin, Berlin, and Shanghai facilities), we expect a surge in the number of Tesla cars. This is because customers are more interested in Teslas now that their prices have gone down, they can get a tax rebate if they buy an electric vehicle, and the industry is struggling to deal with Tesla’s discounting (in-line with management commentary on the recent Earnings Call that demand is outstripping production).
Furthermore, a significant portion of the margin shortfall caused by aggressive discounting...
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