The recent announcement of auto tariffs is expected to have a positive impact on Tesla (TSLA) stock. Since Tesla manufactures its vehicles in the United States, the tariffs will likely benefit the company. However, there are several factors to consider that may affect TSLA’s performance.
Factors Affecting TSLA’s Performance
The following points highlight the complexities surrounding TSLA’s situation:
- Many TSLA parts are foreign-made, which could lead to a significant negative impact on the company.
- Elon Musk has acknowledged that TSLA is not immune to the effects of the tariffs.
- TSLA stock recently approached a resistance zone, which may pose a challenge for further growth.
- The company’s car sales business alone is valued at less than $100 per share.
- To justify TSLA’s valuation, the company needs to achieve positive outcomes in the following areas:
- Robotaxis
- Humanoid Robots
- Energy Storage
- The development of a five-minute car charging system by Chinese company BYD (BYDDF) poses a risk to TSLA if it cannot quickly catch up.
- Backlash from Elon Musk’s political views may also impact the company.
Investment Zones
For investors, it is essential to consider the following zones:
- The target zone for TSLA stock is $683 - $712 in the base case, assuming some success with robotaxis and robots.
- In the optimistic case, the target zone is $2300 - $2600.
- In the pessimistic case, the target zone is $56 - $83.
What To Do Now
Investors can consider the following options:
- Those already holding TSLA stock may choose to continue holding.
- Those not invested in TSLA stock may consider following the parameters outlined above.
It is crucial to note that TSLA is suitable only for aggressive investors, as a wide range of outcomes are possible. Considering scaling in on a dip in the buy zone may be a viable strategy.