Is Tesla a Good Investment?

PHOTO CREDIT: Tesla

OVERVIEW

Tesla Incorporation is a technology company based in the United States. The company operates in the clean energy sector. It manufactures electric vehicles, solar panels and roofs, and large battery packs for residential and commercial use. The company also designs and distributes self-driving software for its vehicles. Its vehicle fleet includes the Model S, 3, X, and Y as well as the 2nd Roadster, Cybertruck, and Semi. The company was founded in 2003.

Why You Should?

  1. Tesla is a great long-term investment due to its future growth prospects. The clean energy industry is going to continue to rise as people and governments want to reduce the impacts of climate change. Tesla is arguably the best stock in this industry as the company will operate 4 car factories in the future and will have solid solar and power wall numbers. This will benefit investors as well.
  2. Tesla has an extremely resilient business. In March, no one thought that Tesla would be having record quarters in the future. However, Tesla has absolutely shut down any doubts in the company. They have been reporting record numbers and the stock is currently up over 640% this year. This has benefited the company’s future growth as they are able to raise money and take up loans. This has also benefited investors.
  3. Tesla will see strong sales numbers under a Biden administration. Biden and his Democrat colleagues want to take steps in order to curb the impacts of climate change. Biden might be able to incentivize people in order to switch to electric cars and installing solar panels and power walls in their homes and businesses. This will benefit the company and will also further benefit investors in the company.
  4. Tesla has absolutely crushed competition. Companies like Ford and General Motors, along with many other EV start-ups have announced and sold electric cars. However, Tesla vehicles will outperform their competition according to several metrics like price, range, and others. Tesla also has invested in infrastructure around the country, unlike other car companies.
  5. Tesla is the leader in the clean energy sector. They offer the best electric cars and the most efficient solar panels and roofs in the business. The company also allows customers to install power walls, a battery system where power from solar panels can be stored for later use. This significant lead has benefited the company and has also benefited investors in the company.
  6. The company has reported rising revenues and lower losses over the past couple of financial years. The company looks to turn a massive profit in the financial year of 2020. This has helped the company grow in the past and will help it grow in the future. These metrics have also benefited investors in the company. In the financial year of 2019, the company reported revenues of around 24.58 billion and a loss of around 862 million. Both of these metrics are better than what the company reported in the financial year of 2018 when the company reported revenues of around 21.46 billion and a loss of around 962 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Though Tesla has outperformed the competition, the EV space is starting to fill up with many companies. Companies like Toyota, Ford, General Motors, Nio, and Nikola (among others) are all planning to enter the field with some great vehicles. This might hurt Tesla in the future and might also hurt investors in the company.

MY OPINION

I think that Tesla is a great long-term investment due to good long-term growth prospects, a resilient business, a Biden administration, outperforming the competition, its lead position in the clean energy industry, and rising revenues and profits. However, tough competition might hurt Tesla in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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