Can Tesla Inc’s Potential Overcome Its Short-Term Issues?

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TSLA - Can Tesla Inc’s Potential Overcome Its Short-Term Issues?

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Tesla Inc (NASDAQ:TSLA) is making headlines again as mainstream media outlets report the first look of its electric semi-truck. Although TSLA has previously released official publicity photos of the Tesla Semi, we finally saw a prototype driving on the roads of Santa Clara, California.

Thanks to the magic of Alphabet Inc’s (NASDAQ:GOOG,NASDAQ:GOOGL) YouTube platform, investors can also see where their hard-earned money is going.

TSLA stock had a robust but choppy year in 2017. The wild price action led many analysts to question the company’s forward progress. After all, Tesla doesn’t exactly have the same operational discipline that guide traditional automakers.

The doubters and critics further articulate their position by pointing to the financials. At first glance, the numbers don’t look good at all. At second glance, the numbers really don’t improve that much. The company continues to rack up debt aggressively. They push net income alarmingly deeper into the abyss. If you’re buying Tesla stock, you’re buying on its potential.

Most adherents are completely fine with that. TSLA stock is a gamble, to be sure. But few organizations exist that are as innovative as Tesla. It wasn’t that long ago that critics slammed Amazon.com, Inc. (NASDAQ:AMZN) for not making any money. Amazon, however, proved that absorbing short-term pain can lead to long-term dominance.

This concept encourages shareholders who bought TSLA stock near all-time highs. But the difference is that Amazon has far fewer chances to kill people.

Tesla’s Autopilot mode’s alleged failures are increasingly common. The failures highlight the fact that more work needs to be done before we trust artificial intelligence with our lives. Therefore, Tesla stock criticisms don’t exclusively revolve around the poor financials.

Powerful Potential for TSLA Stock

I’ll freely admit that Tesla has several challenges that it will need to overcome. However, some of the key problems are overstated, in my opinion. Moreover, they shouldn’t detract from the longer-term view of TSLA stock.

For instance, the Autopilot’s failures are downright scary. But what’s scarier is driver and consumer incompetence. Neither Tesla nor any other automaker deploying a similar device claim that such safety mechanisms drive themselves. In other words, you are primarily responsible for your own safety — and the safety of others.

As far as those financials go, we’re not talking about a stagnant or declining industry. Instead, Tesla stock is firmly levered toward the future. Whatever our own individual opinions, electric vehicles will dominate the automotive landscape. The Tesla Semi is further confirmation of this ongoing development.

For starters, the Semi is absolutely gorgeous: It genuinely looks like it visited us from the future via a wormhole. More importantly, its beauty isn’t just skin deep. Superior aerodynamics is one of the most effective ways to make semis more energy efficient.

Secondly, Tesla’s variant meets heavy demand. For several years, prior to the Trump administration, the federal government prioritized go-green initiatives. One popular solution was to invest more in railroad transportation, and reduce semi-truck dependency. However, railroads aren’t cheap. Let’s also not forget that semis are logistically far more flexible.

The Tesla Semi is the perfect, energy-efficient solution. Truckers will love it, and they will keep their jobs. Railroads will still play an integral role in our transportation networks, and we won’t have to shell out taxpayer money for unnecessary additions. Finally, we can improve environmental quality without sacrificing our highly advanced quality of life.

Needless to say, this is a great argument for TSLA stock.

TSLA Stock Is for Patient Investors

I’m not promising cryptocurrency-like returns. What I am saying is that it’s ridiculous to nitpick the Tesla stock price. Distracting headlines and the usual TSLA eccentricities may ding shares in the nearer-term. But don’t miss the forest for the trees.

I’m confident that five years from now, would-be investors will kick themselves for not buying TSLA stock now. Sure, the financials right now don’t look too hot. And headlines about Autopilot steering drivers into big, bright firetrucks aren’t helpful.

But investing isn’t about betting on a known event; that’s what your savings account is for. Investing always involves risk because you’re placing your chips on something that hasn’t happened yet.

Fortunately, Tesla stock soothes investor jitters. This is a company that, while unconventional, knows how to deliver.

Ignore the chatter and the noise, and focus on its potential.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


Article printed from InvestorPlace Media, https://investorplace.com/2018/01/tesla-inc-tsla-stock-potential-overcome-short-term-issues/.

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