Electric vehicle (EV) maker Tesla’s (TSLA) shares are currently trading significantly below their $900.40 all-time high, which they hit in January 2021. The price decline can be attributed primarily to the problems TSLA is facing because of a global semiconductor shortage. The question is, given the EV industry’s immense growth potential and TSLA’s dominant position in the market, is it wise to buy the stock at the current price level? Let’s find out.Tesla, Inc. (NASDAQ:TSLA) is known for its electric cars, such as Model 3, Model Y, Model X, Model S and Cybertruck. The company also designs, manufactures, installs and sells solar energy generation and energy storage products, and it is expected to expand into the restaurant business space as well. However, TSLA has been associated with many controversies and is facing several challenges, including vehicle recalls and a global semiconductor shortage.
The stock has lost more than 15% so far this year to close Friday’s trading session at $599.05, 33.5% below its 52-week high.
Company CEO Elon Musk said this month that TSLA has been forced to raise the prices of its cars due to a global shortage of computer chips. This could affect its sales. Also, the company is losing its market dominance in China as Chinese electric vehicle (EV) makers ramp up their production. Musk is also being scrutinized by the SEC for his tweets. It is speculated that his tweets have violated the terms of a settlement agreement that required him to have his tweets pre-approved by the company’s lawyers. So, we think TSLA’s near-term prospects seem uncertain.