Despite rising competition and ongoing volatility, electric vehicle (EV) maker Tesla (NASDAQ:TSLA) is not down and out. Rather, shares of TSLA stock are still a safe bet on the future of EVs.
The price chart for TSLA looks like a rollercoaster for the past month, with many peaks and troughs. The shares have basically been trading in a range between $1,000 and $1,250, rising and falling in 25% increments.
As of the close of Nov. 29, the stock was priced at nearly $1,137 per share, which is up 2% over one month but down over 1% in the last week. While the stock has found support at $1,000, it has struggled to break above the $1,250 mark even as some analysts are calling for it to rise as high as $1,400.
Here’s what you should know about TSLA stock moving forward.
TSLA Stock and Elon Musk’s Big Sale
The current swings in TSLA stock have resulted from a volatile period in which CEO Elon Musk has sold billions worth of shares. Of course — as has become typical of Musk — he turned the share sale into some drama, holding a Twitter (NYSE:TWTR) poll for his more than 65 million followers. The vote came out in support of the stock sale, which was reportedly to help Musk pay a $15 billion tax bill (although some prominent voices on Wall Street have doubted those claims).
Regardless of the motives, this massive sale of TSLA stock has certainly caused gyrations in the share price over the past few weeks. The timing of the sale was a bit difficult as well, coming during a strong rally in all stocks related to EVs. Following the Nov. 10 initial public offering (IPO) of EV maker Rivian (NASDAQ:RIVN), the entire sector had started to move higher.
While Tesla has enjoyed some gains, the stock started moving more erratically when reports surfaced of the stock sale. Critics continue to claim that the CEO’s antics — and their timing — only harm Tesla stock.
Growth and Expansion
The big sale aside, there are still good reasons to be bullish on TSLA stock and its long-term prospects. While Tesla is facing growing competition from startups like Rivian as well as established names like General Motors (NYSE:GM) and Ford (NYSE:F), the company still retains a two-thirds share of the EV market in the States. Globally, Tesla is also the best-selling EV manufacturer. Interestingly, Tesla is gaining ground in its luxury vehicle market share, too. The company recently overtook Mercedes-Benz (owned by Daimler (OTCMKTS:DDAIF) in the U.S. luxury car market.
And Tesla shows no signs of slowing. For example, the company just announced that it’s investing $188 million to expand production capacity at its Shanghai EV plant, allowing it to hire 4,000 more people at the site. Tesla’s Shanghai “gigafactory” was designed to make some 500,000 cars per year. It’s not clear how much manufacturing capacity will be increased by the expansion.
On top of this, though, the company’s China sales are also surging. In October, Tesla sold 54,391 China-made vehicles, including 40,666 for export, according to the China Passenger Car Association (CPCA). The Shanghai factory is “wholly owned by Tesla and is the first and only foreign passenger car plant in China exempt from being operated by a joint venture.”
The Bottom Line on TSLA Stock
Tesla shareholders have come to expect a certain amount of drama from CEO Elon Musk. His ongoing antics continue to roil the share price. However, taking Musk’s hijinks out of the equation, Tesla is still the global leader when it comes to EVs. What’s more, its dominance shows no signs of being severely tested anytime soon.
Tesla remains supremely innovative and aggressive when it comes to the worldwide sale of its vehicles, in markets ranging from the U.S. and Canada to Germany and China. Given its strong market position, the popularity of its EVs and its solid fundamentals, TSLA stock is ultimately a buy.
On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.