That’s quite the blog title, but hear me out before you close the tab thinking “This guy is just hurt because he missed out on the massive growth.” I love the Tesla Model S as a vehicle. I think it looks incredible, has amazing features and technology, and is consistently updated to keep it fresh. It’s what I want from a vehicle, but I just cannot get behind the company just yet.
I’ve already gone over why I’m never going to lease a car again, but why didn’t I just purchase a Tesla Model S in the first place? Put quite simply: I couldn’t afford one. I fell into the consumerism trap by treating my mode of transport as I did my smartphone many years ago with pricey contracts on goods I simply couldn’t afford outright. The same cannot be said for Tesla stock, however.
I’ve hovered over buying it for years now. Back when it was $50 per share to now upwards of $500 per share. If I had made the plunge, I would be sitting on a small fortune for my dividend and FIRE investment strategy, but I failed to purchase any. I continued to sit on the sideline as the price started to rocket. Why?
Tesla has incredible potential
The electric vehicle (EV) market is quite small right now. It’s growing at a much faster pace than ever before, with traditional internal combustion engine (ICE) manufacturers like Volkswagen, Ford, and BMW working on new EVs as they desperately try and reposition themselves towards a greener future, but it’s difficult.
Tesla has the potential to cash in on struggling traditional carmakers and grab up all those potential sales with its S3XY model line-up of premium vehicles. If the ICE carmakers are unable to successfully transition — and I believe some of them will be unable to replicate ICE success — Tesla is working hard to be there to expand its reach worldwide.
The issue here is this is all speculation. Tesla could make it big, but it’s relying on so many possibilities. The company needs ICE carmakers to fail in order to provide more customers through its doors and website. It also needs to start making money in the process, because right now it’s bleeding … heavily.
The stock price and performance of TSLA in the NASDAQ are not representative of where Tesla is right now and that’s why I struggle to bring myself to become a Tesla investor.
What the %^&* is going on with TSLA?
Just look at it. I’ll repeat what I wrote earlier: Tesla, as a company, is losing money. Yes, it has incredible potential. The product line it has right now with EVs, solar power, and battery storage is groundbreaking, but it’s still losing money. Nothing daddy Elon Musk can say changes that fact, which is a huge red flag for any company I choose to invest in.
It pains me to see each financial report and see that the situation hasn’t improved enough for me to jump in yet. I want to invest in Tesla. I believe in its future and I see the company becoming quite the technological giant in the years to come. For now, however, it truly is a gamble as to whether Tesla will be able to keep its lights on.
Then there’s the who shorting of Tesla. Tesla and TSLA are two very different beasts. Tesla is a company many people respect, while the stock is often viewed as a joke. The warfare between bulls and bears over TSLA is the source of countless ports on the Wall Street Bets Reddit community and beyond, with more memes out there than you can care to keep up with.
The share price is volatile, no matter how you view the graphs and I don’t see this changing anytime soon. People are betting on Tesla, either way, and it’s way too emotional for me to get involved. If all that wasn’t enough, the current price-to-earnings (P/E) ratio is 1,048.06. You read that correctly. 1,048.06. The average P/E ratio for S&P 500 stocks is below 30.
There’s also the case that Tesla has yet to start paying a dividend, largely because it simply cannot afford to do so. We’re never owed anything from a company, but I would appreciate some sort of return in this regard once Tesla stabilizes itself.