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TSLA Stock Can Survive and Thrive Even With a Supply Chain Crisis

The stock market is still recovering from the latest earnings call from Tesla (NASDAQ:TSLA). In 2021, CEO Elon Musk told the world that he wouldn’t be part of these reports unless he had something important to say. Two quarters later, though, he opted to once again speak to investors. This call brought plenty of important takeaways for investors. Although TSLA stock fell the next day, nothing Musk said should make investors nervous about the coming year. For some of his critics, though, Musk’s comments posed a risk to the entire electric vehicle (EV) sector.

Tesla (TSLA) logo on city building at night
Source: Vitaliy Karimov / Shutterstock.com

What’s Happening With TLSA Stock

As turbulent as this week as been, TSLA stock looks ready to close it out on a high note. As of this writing, it is up 2% for the day and rallying after a slight downtick. It remains in the red for the week by 6.5% and by 22% for the month.

At first glance, it’s easy to attribute Tesla’s gains to positive market momentum, a reversal of the trend that has kept it down this week. However, a closer look reveals that such an intuition would likely be false. Fellow EV stock Lucid Motors (NASDAQ:LCID) is down 5.4% for the day. And while its peer Rivian (NASDAQ:RIVN) is indeed back in the green, it received a major catalyst today when an analyst prediction forecasted significant growth for the year ahead.

Why It Matters

Following the earnings call, CNN Business’ Chris Isidore sharply criticized Musk’s performance on the call, stating that it would have been better for TSLA stock if he had stuck to his promise. To his way of thinking, Musk’s admittance of the supply chain difficulties facing Tesla reflected poorly not just on his company but on the entire sector. While it is true that TSLA stock was down yesterday following the call, that doesn’t mean that the industry landscape is as bleak as Isidore paints. Let’s take a closer look.

Isidore’s chief criticisms seem to be that Musk admitted that the supply chain crisis had posed constraints for EV production. While it’s true that Musk may not have provided reassuring words for investors on that front in the manner that Wall Street saw from Apple (NASDAQ:AAPL) CEO Tim Cook, he did emphasize that the company was focused on growth, scaling and production in 2022.

It’s also not news that the supply chain problems have been inconvenient for automakers. Musk has tweeted about exactly that on multiple occasions. Yet so far, it hasn’t pushed TSLA stock down by any serious amounts. Industry experts have noted that even when supplies are limited, Tesla’s size gives it an advantage over smaller competitors.

Additionally, Isidore cited critical comments from WedBush Securities analyst Dan Ives. While Ives’ concerns were perfectly valid, he still maintains a buy rating and a $1,400 price target on TSLA stock. One of the call’s top takeaways should be that many analysts remain bullish on Tesla. In fact, since yesterday, more have joined the pack.

What It Means

The supply chain crisis hasn’t been good for any manufacturers. Tesla has certainly not been immune, but it weathered the storm last year and still exceeded expectations on deliveries for the final quarter of 2021. There’s no immediate reason to think that the company won’t continue to grow in 2022.

As it grows, so will TSLA stock. Yes, competition is rising, as Isidore noted, but Tesla remains the undisputed leader of the EV race. Musk has no wish to surrender that title, and he’s going to ensure that it doesn’t happen. The recent record-setting production statistics indicate that he won’t have much trouble.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/01/tsla-stock-can-survive-and-thrive-even-with-a-supply-chain-crisis/.

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