Cheap cars

TSLA stock can survive and thrive even without cheap cars

You’re here (NASDAQ:TSLA) continues to prevail, even when Wall Street wants to bring it down. The electric vehicle leader once again demonstrated its prowess this week in the face of bearish analyst reports. So what do you need to know about TSLA stocks right now?

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On Monday, Bernstein analyst Toni Sacconaghi reiterated his “sell” recommendation and $300 price target. The analyst raised concerns about a slowdown in fully autonomous driving (FSD) software and delays in the production of a $25,000 car.

However, investors learned again today that one analyst is not strong enough to bring down a company like Tesla. You should brush off Sacconaghi’s worries and consider TSLA stocks a winner.

What’s going on with TSLA stocks

In his memo, Sacconaghi expressed concern that Tesla might not be developing a more affordable electric vehicle in the near future. The decision “feels at odds with Tesla’s goal of driving the adoption of electric vehicles as quickly as possible,” he wrote.

The analyst points to bullish comments from CEO Elon Musk during the fourth quarter earnings call. There, he shared that the automaker wouldn’t prioritize new models in 2022. Instead, Tesla would focus on scaling up production of its current lineup. This decision stems, at least in part, from ongoing global supply chain issues.

While Sacconaghi views the decision not to prioritize a $25,000 car until 2025 as a problem, Musk’s decision illustrates what investors should like about Tesla. The electric vehicle maker survived 2021 despite supply chain challenges, still posting record fourth quarter deliveries. Focusing on what it knows – and what sells – in 2022 is a smart move.

Beyond that, recent data reveals that Tesla is the most searched car brand in the world. When consumers buy electric vehicles, Tesla is always the first name they think of. This remains true despite its high prices.

Indeed, it will serve Tesla well to continue with its current business model and not depreciate its brand. Driving a Tesla is still considered a status symbol by many, giving it a competitive edge.

What happens after

The bottom line is that Tesla doesn’t need to depreciate its name by producing more affordable cars, at least for now. A revolution in electric vehicles is underway, and the road ahead for Tesla looks smooth.

At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.