The year 2024 hasn’t started on a positive note for Tesla (NASDAQ: TSLA) investors. The American electric vehicle (EV) giant’s share prices have dived by more than 30% so far this year to currently trade at US$171.05 per share, trimming its market capitalization to US$544.8 billion.
In 2023, Tesla’s total vehicle production and deliveries reached record levels of 1.85 million and 1.81 million, respectively. However, in the first quarter of 2024, its total production slipped by 1.7% YoY (year over year) to 433,371 vehicle units, while its total deliveries declined by 8.5% from a year ago to 386,810 vehicle units. It’s important to note that the recent weakness in Tesla’s quarterly volumes was mainly due to a big decline in its Model 3 and Y numbers, as its quarterly production and deliveries for other models still continued to increase on a YoY basis.
Image source: Getty Images
Why I’m bullish on Tesla
The Elon Musk-led company blamed “the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin” for its weaker first quarter volumes. While these temporary factors affected its volumes last quarter, it doesn’t necessarily mean that Tesla’s long-term growth story is over, as some bears argue.
The demand for EVs is expected to continue surging in the years to come, with more countries across the world committing to reducing their carbon emissions and promoting clean energy. As the global leader in EVs, Tesla has a strong competitive advantage over its rivals in terms of technology, innovation, brand recognition, and customer loyalty. Tesla’s vehicles are not only environmentally friendly but also offer great safety features, design, and performance, making its long-term growth outlook bright.
A top Canadian EV stock to buy now
While Tesla remains the undisputed leader of the EV market, it’s not the only company that is likely to benefit from the global shift to greener transportation. In fact, there is another EV stock that I believe has even more upside potential than Tesla in the coming years. And it’s not based in the U.S. or China but in Canada.
Magna International (TSX: MG) has been silently positioning itself as a key player in the EV segment, not just as a manufacturer but as a crucial supplier of EV components. At CES (Consumer Electronics Show) 2024, Magna introduced its next-generation 800V eDrive, which stands out for its high efficiency, powerful torque, and compact, lightweight design. This innovative eDrive, weighing only 75 kilograms and achieving a 20% height reduction from previous models, can pivot 90 degrees around its axis for better integration into vehicle spaces.
This development came a couple of years after Magna launched EtelligentForce, an innovative electric powertrain system for pickups and light commercial vehicles, which is expected to go into production in the coming years. This diversified approach, supplying critical elements to multiple automakers, should help Magna to benefit from the overall growth of the EV sector globally. Despite these positive factors, however, Magna hasn’t seen any appreciation from investors of late, as its stock has lost nearly 43% of its value in the last three years, making it look undervalued based on its long-term growth outlook.
