No matter what founder Elon Musk does with social media platform X or his other antics, investor belief in Tesla Inc. (NASDAQ: TSLA) only continues to rise. In 2023, Tesla stock jumped over 100% as its market cap hit $760 billion, ninth among all publicly traded companies, just behind Warren Buffett’s Berkshire Hathaway. Can the shares continue to rise in an auto industry where the electric vehicle (EV) sector has become more competitive?

The past few days have been good news/bad news for Tesla investors. Tesla produced a record of 1.85 million vehicles last year, up 35% over 2022. At the same time, China-based EV company BYD said its tally was slightly bigger. Tesla is no longer the largest EV company in the world based on unit sales. Tesla investors like to point out that most BYD models are sold in China only. However, China is the world’s largest car market.

Tesla still has half of the EV sales in America, the world’s second-largest car market. At least a dozen other companies are chasing it. Some of them are huge multinationals, including BMW, Ford, General Motors and Nissan. None of these has produced a model that has sold well despite billions of dollars in EV R&D, production, design and marketing investments.

A much smaller group of EV companies hopes to take enough market share to survive. These include Rivian and Lucid. Neither of them has been able to sell more than a few thousand vehicles a year. And each has a balance sheet that must make investors wonder how long it will be in business.

What’s Next for Tesla Stock?

Among Tesla’s huge advantages is its universally recognized brand. It does not need expensive marketing campaigns. Many Americans think the EV industry in the United States is Tesla. The company is in the headlines almost every day, as is Musk.

Tesla stock has more than one hurdle to clear to continue its run. Among these are investigations into the safety of its vehicles, particularly the autonomous driving features. There have been some deadly accidents when this system was engaged. Tesla’s defense has been primarily that drivers who were hurt or killed were not using the system based on the safety rules given to owners. (Here are five reasons to avoid Tesla’s Cybertruck no matter what.)

Tesla will have more competition. Too much money flows into the EV manufacturing market for all these efforts to fail. Even if large car companies only get a few percentage points of overall U.S. sales, Tesla’s market share will continue to dip. Tesla has started a price war to keep its sales high. The tactic has worked, but the discounts also hurt margins.

The formidable issue facing all EV companies is the reluctance of the American car buyer. EVs can take hours to charge. A driver can fill a gasoline tank in a few minutes. EV chargers are scarce outside large metro areas. There are 145,000 gas stations in America. Many EVs have a range of only 300 miles.

Can Tesla stock rise another 100% this year? It has a lot of obstacles in its way.

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