It’s been a rocky few months for electric vehicle (EV) giant Tesla (NASDAQ:TSLA). The company has reported disappointing delivery numbers, as well as being caught up in the general short-term negative sentiment about EV growth. Tesla shares have dropped as some buyers have thrown in the towel. Let’s dig deeper.
Not pretty
At the start of the year, Tesla stock opened at $248. It currently trades at $169. This marks a 31.8% fall in just over three months. So my £1k would currently be worth £682.
This is quite a poor performance when I consider the broader market. In the US, equity markets (such as the Nasdaq that Tesla is listed on) have soared, hitting all-time highs. So the fact that the Nasdaq is up 11% year-to-date and Tesla is down 31.8% is a large difference.
However, I should also factor in performance of other EV stocks. NIO is a good case to consider. The stock is down 46% in 2024, quite a fall! So when I compare Tesla to some competition, I can make an argument that it has at least done better than others.
Yet given the size of the fall, this isn’t much of a consolation.
Actions from here
I didn’t buy Tesla shares at the start of the year. However, given the slump, I’m thinking about buying some in the near future. I don’t think that the negative sentiment has completely finished, and with the share price tumbling, I want to see some clear signs that the rout has finished before stepping in.
From looking at long-term price movements, the area around $150 has been a level where value buyers have in the past stepped in. This is the level at which I’m looking to buy.
Som who did invest at the start of 2024 might want to consider adding more stock at this lower level. This strategy is known as pound (or dollar) cost averaging. It helps to lower the average price paid overall, which therefore means the investor only needs a smaller move higher to get back to break-even.
Take a step back
It’s true that the delivery numbers for Q1 were poor and missed expectations. However, let’s not forget that EVs are still the future. It’s a long-term trend that will have bumps along the way. I believe Tesla will continue to be at the forefront of pushing new tech and should benefit in years to come.
For example, the firm is reportedly looking for sites in India to build a large new factory. It’s also due to reveal the new roadster car at the end of this year, which could boast a 0-60mph time of under one second.
Of course, we might look back on this moment as the beginning of a downward trend for EVs. This is a risk, but I struggle to see that being the case.
