Investing in Tesla Stock (TSLA)

Tesla, Inc., formerly known as Tesla Motors, has grown since its IPO a decade ago into one of the world’s biggest producers of electric vehicles under the leadership of CEO Elon Musk. The company sells cars, SUVs, and trucks. In addition to electric vehicles, it has expanded into energy generation and storage systems. Tesla joined the S&P 500 and S&P 100 on December 21, 2020. Tesla is listed on the Nasdaq exchange under the ticker symbol, TSLA.

The company’s automotive segment accounts for the vast majority of revenue at the Palo Alto-headquartered company, and the U.S. accounts for just under half of sales. Tesla faces growing competition from other major automakers who are developing and marketing electric vehicles, including General Motors Co. (GM), China-based Nio Inc. (NIO), Volkswagen AG (VOW3), and Daimler AG (DAI), the latter two of which are headquartered in Germany.

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Tesla’s Latest Developments

• On March 8, 2021, Bloomberg reported that Tesla’s subsidiary, Gambit Energy Storage, is developing a 100 megawatt energy storage project Angleton, Texas. The project is expected to open on June 1, 2021, and at peak capacity could power up to approximately 20,000 homes for an as-yet unknown duration.
• On February 25, 2021, Tesla CEO Elon Musk announced Tesla’s U.S. car factory had to shut down for two days due to parts shortages. While Musk didn’t clarify the nature of the shortage, a global semiconductor shortage has plagued the entire car industry. Many car companies, such as Ford, GM, and Volkswagen have stopped some of their production lines while they wait for parts. President Joe Biden signed an executive order on February 24, 2021, mandating a review of semiconductor supply chains in U.S. industries.
• On January 27, 2021, Tesla reported Q4 FY 2020 adjusted EPS that missed analysts’ expectations by a wide margin. But it was nearly double the figure posted in the year-ago quarter and marked the sixth consecutive quarter of profits. Revenue beat analysts’ forecasts by a narrow margin. Tesla’s vehicle deliveries for the quarter, which it reported earlier in the month, rose at a robust pace. Tesla noted that its results were positively impacted by volume growth and regulatory credit revenue growth, but that price reductions on certain car models offset some of that positive impact.