BUY Tesla (TSLA)
Tesla is a widely popular vertically integrated sustainable energy company founded by Elon Musk. The company designs and produces electric vehicles, residential and grid-scale battery energy storage, solar panels, solar roof tiles, and associated goods and services. The company is popular for its fleet of electric vehicles, deemed essential in the future transition to zero carbon emission.
$TSLA electric car fleet includes a variety of automobiles, such as premium and medium sedans and crossover SUVs. Its products are bold, distinctive, elegant, and highly entertaining to drive. The company is led by visionary leadership, backed by a management team with solid functional strength. Tesla sold over 1.3 million automobiles globally in 2022.
Tesla’s shares are down 70% over the past year as the market continues to re-rate the company’s multiple in a high-interest rate environment. Despite the massive sell-off in the stock, the company is still trading at a significant premium to peers due to the company’s wide economic moat. The company has a significant cost advantage over other EV automakers, given its large scale.
The company’s production in volume increased from 100k in 2017 to approximately 1.37 million vehicles in 2022. At the same time, the company’s gross margins have continued to improve over the period owing to economies of scale and regulatory credits granted by the government.
As governments around the world begin taxing carbon emissions, many legacy automakers are transitioning to hybrid, and electric vehicles, which means that Tesla will have to contend with more competition in the future. However, Tesla remains well-positioned with its technological edge, the power of its brand, and cost advantages which will endure when new models are released, enabling the business to maintain premium pricing for its EVs.
Source: Yahoo Finance