Tesla investors double-down despite the drop

Tesla (NYSE:TSLA) stock has had a rough time last year and still looks weak this year. However, TSLA's supporters are not too perturbed and see the stock rising strongly from current price levels.

Last year, Tesla shares collapsed by 64%. The sell-off intensified in November and it was the worst month on record for the electric vehicle giant.

The last quarter was the worst quarter on record for Tesla. Lastly, the company lost $674 billion in market capitalisation last year and had its worst year ever.

Tesla stock looks weak in 2023 too
This year has also started on a negative note for Tesla, which saw a double-digit drop on the very first day of trading. This was the worst one-day decline for the stock since 2020 and it hit a 52-week low. Other tech stocks also started 2022 on a negative note and Apple's market capitalisation fell below $2 trillion.

Apple joined Amazon in losing $1 trillion in market capitalisation. In the turmoil, Amazon, Meta Platforms and Tesla lost their status as $1 trillion companies.

Demand concerns weigh on electric vehicle stocks
In December, Tesla delivered 55,795 EVs in China, down 43% from November. Although TSLA CEO Elon Musk has downplayed concerns about demand, a slowdown in demand is becoming evident every day. Last month, Tesla halted production at its Shanghai Gigafactory.

Although the company attributed the shutdown to factory maintenance, it is now clear that it is due to declining demand. Notably, Tesla has lowered prices for cars in China. The company has also cut prices for cars in China in the fourth quarter of 2022. It has also offered other incentives to boost sales.

Tesla remains the biggest seller of EVs
In 2022, BYD Motors, which is backed by Berkshire Hathaway, overtook Tesla to become the largest seller of new energy vehicles. It sold 235,196 vehicles last month, a new record for the company. BYD's deliveries have reached a record level for four consecutive quarters.

Last quarter, BYD sold 683,439 vehicles, up 156% year-on-year. For the whole year, it sold 1.85 million cars, far ahead of Tesla's 1.32 million deliveries. It should be noted here that while Tesla only sells battery electric vehicles, BYD also sells plug-in hybrid electric vehicles.

Ford became the second largest seller of EVs last year
While BYD has overtaken Tesla in terms of total sales, the Elon Musk-led company remains in the lead when it comes to BEVs. That said, BYD is catching up with Tesla in BEV deliveries as well, and BEV deliveries last year have reached almost 1 million. Some analysts expect it to become the largest BEV seller this year.

While BYD is fighting a tough battle with Tesla in China, in the US, traditional carmakers are rapidly ramping up production. Last year, Ford became the 2nd largest seller of EVs in the US, although it's still far behind.

Tesla is facing multiple problems, from declining demand growth to the fallout from Musk's acquisition of Twitter. However, some of TSLA's most ardent supporters are not too perturbed and are optimistic about the stock's prospects.

Cathy Woods predicts a massive rally in Tesla shares
Cathy Wood sof ARK Invest, who is among the biggest supporters of TSLA stock, said the stock could rally nearly 15-fold to $1,500 over the next five years.

However, Cathy Woods said many people would not buy Tesla shares now, given the controversies surrounding Musk. But she added: "But if he does what we think he's going to do on the cost side, a lot of people will be driven by the economy. Better car, better economy. And I think there are a lot more of those people than there are opponents of Twitter."

Woods bought more Tesla shares when they crashed. Some of the other supporters of TSLA stock, such as Morgan Stanley's Adam Jonas, are also positive on the stock, although he acknowledges the fallout from Musk's acquisition of Twitter.

Mizuho also reiterated its buy on TSLA stock, although it lowered its target.