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Tesla’s Perfect Storm: Why TSLA Stock Is Doomed to Dive by Year-End

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How do electric vehicle drivers rate the quality of Tesla’s (NASDAQ:TSLA) vehicles? We found a surprising research study on this. The perception of product quality matters greatly. After examining the alarming facts, Tesla stock only deserves a “D” grade.

Some are hesitant to invest in Tesla because of Elon Musk’s obsession with robotaxis. Investors should focus on the financial implications of Musk’s robotaxi obsession. Finally, a huge Tesla share-price recovery seems less and less likely.

Tesla’s Worsening Quality Score

Rather than provide our own opinion of Tesla’s battery electric vehicles, we’ll refer to J.D. Power’s research. According to J.D. Power, Tesla’s quality score declined from 266 in 2023 to 253 in the current year.

Bear in mind, a higher score indicates more vehicle problems and, hence, lower quality. In terms of having the most problems, Polestar Automotive (NASDAQ:PSNY) had the worst score (316) and Stellantis (NYSE:STLA) owned Dodge had the second-worst score (301).

Tesla’s score of 266 was the third-worst in J.D. Power’s research study. J.D. Power seemed to suggest that this was Tesla’s fault, stating, “The removal of traditional feature controls, such as turn signals and wiper stalks, has not been well received by Tesla customers.”

Don’t Count on Robotaxis to Rescue Tesla Stock Soon

Tesla stock has been an underachiever in 2024 so far. We can’t simply blame overall market conditions, since the Nasdaq and S&P 500 indexes have performed well this year.

Die-hard Tesla optimists might pin their hopes on the company’s upcoming robotaxi reveal. Musk announced on X (formerly known as Twitter), “Tesla Robotaxi unveil on 8/8” (meaning Aug. 8 of this year, presumably).

In this highly efficient market, any excitement about Tesla’s upcoming robotaxi reveal has certainly already been priced into Tesla stock. Now, it’s up to the company to prove that these autonomous vehicles will actually generate strong returns.

Investors shouldn’t make any hasty assumptions about this. Regarding Tesla’s robotaxi, JPMorgan Chase analyst Ryan Brinkman doesn’t “expect material revenue generation likely for years to come.”

That’s potentially problematic when the ultraefficient market tends to look months or even years out into the future. If investors are on board with Musk’s push for robotaxis, then they’ve probably already baked their revenue-growth assumptions into Tesla stock.

Tesla Stock Comeback? Don’t Hold Your Breath.

Tesla’s investors have lagged the Nasdaq and S&P 500 in 2024 so far. That’s frustrating, but maybe they’re hoping for an awe-inspiring comeback.

It’s problematic, though, that Tesla’s product-quality score is reportedly worsening. Moreover, the company probably won’t generate meaningful revenue from its robotaxis in the near future.

So, don’t hold your breath and assume that Tesla stock is somehow “due” for a bounce. We’re assigning the stock a “D” grade today, so be sure to conduct your full due diligence if you’re considering a risky investment in Tesla.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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