Tesla (NASDAQ:TSLA) stock had its share of challenges, especially with CEO Elon Musk’s consistent drama in 2023. It generated returns and probably can continue the momentum continue in 2024, but investors need to beware. Musk and Tesla are banking on a successful production ramp-up of the Cybertruck. The Cybertruck’s appearance is unconventional and its revenue potential is uncertain.
Overall, Tesla stock can continue to climb in 2024 and it earns a fairly confident “B” grade. Just don’t assume that the stock will perform next year like it did in 2023. That’s a tall order, and making assumptions can be bad for your financial health.
TSLA Stock Stays Resilient Despite Vehicle Recall
One event that can put an automaker stock to the test is a large-scale vehicle recall. If the stock can withstand this type of event, it’s often a good sign.
Tesla seems to do everything with a “go big or go home” attitude. This even applies to the automaker’s recent electric vehicle recall. Specifically, Tesla recalled approximately 2 million vehicles across four vehicle models.
The recall pertained to a potential safety issue with a driver-assistance feature. Tesla promptly addressed the issue through system updates and a recall.
This is a concern, but it shouldn’t be a deal-breaker for investors. After all, automotive recalls of 1 million vehicles or more are more common than you might think they are.
Besides, TSLA stock only fell for a short period of time on the recall news, and the share-price dip was shallow. Hopefully, Tesla will continue to improve its driver-assistance technology so this type of event won’t happen again in 2024.
A Possible Cybertruck Roadblock
As mentioned earlier, Tesla and Musk are banking on the success of the Cybertruck. It won’t necessarily be make-or-break for Tesla, but investors will certainly be disappointed if the Cybertruck fails to make waves in the EV market.
There may be an obstacle, though. According to a Reuters report, “Tesla’s Giga Texas factory is currently churning out 4680 battery cells at rate only sufficient to power about 24,000 Cybertrucks a year,” that’s only “about a 10th of the required output.”
Tesla is struggling to manufacture 4680 batteries for Cybertrucks. This is due to challenges with dry coating on this battery type. Per Reuters, an anonymous source stated that “Tesla had yet to crack dry-coating at the industrial scale needed to make 4680 batteries fast enough to hit its production targets.”
This isn’t the end of the road for Tesla and the Cybertruck, of course. Tesla has vast capital resources and will almost certainly “crack the code” for the 4680 batteries. It’s probably just a matter of time, though the market isn’t known for being patient.
Be Realistic With Tesla Stock in 2024
The coming year will be dramatic for Tesla’s shareholders, no doubt. Musk and Tesla never fail to deliver innovative concepts along with never-ending drama.
Still, Tesla is a “Magnificent Seven” member for good reasons. The company is a giant among EV manufacturers and has plenty of capital, both financial and human, to address its problems.
So, as we embark upon a new year, we’ll give TSLA stock a “B” grade. It’s generally appropriate for a small share position, as long as you’re prepared for a roller-coaster year in 2024.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
