By the start of 2024, the electric vehicle (EV) industry appeared to be in utterly dire straits, with many major firms in the sector seeing decisive stock market declines and some – like Lucid Motors (NASDAQ: LCID) – even hitting new all-time lows.
Come February, however, there was a change in both main EV-producing countries – the United States and China – and a wide array of electric vehicle companies saw their stocks come back into the green over the course of 30 days, with Li Auto (NASDAQ: LI) being the most dramatic example, and Tesla Motors (NASDAQ: TSLA) – due to its prominence – arguably being the most important.
Still, despite the uptrend, there remain evident chinks in the armor of the industry, as exemplified by Tesla’s continuous struggles on the business side.
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Trials and Triumphs of Tesla
Some of the examples that the EV winter might not be as finished as the stock market might suggest come in the form of ongoing Scandinavia-wide strikes against Elon Musk’s company, a 19% decrease in year-over-year (YoY) deliveries in China amidst the Lunar New Year holidays, the shockingly low January sales figures in South Korea, and the constant deluge of price cuts on TSLA vehicles.
On the other hand, despite the lacking demand and rising competition, Tesla Motors has, throughout the last year, achieved many milestones, with its record-breaking 2023 delivery figures being far from the least important.
Given the triumphs and trials for the industry and its most recognizable firm, Finbold decided to consult ChatGPT – the flagship artificial intelligence (AI) platform of OpenAI – on how Tesla stock might fare by the end of the year.
ChatGPT-4 predicts Tesla stock year-end price
ChatGPT-4 proved very cautious when assessing Tesla’s likely stock market performance despite giving a seemingly bullish business analysis.
OpenAI’s most advanced model, for example, lauded Tesla’s price cuts as a sign of the company’s strategic flexibility, though it did point out that while they are likely to boost volume, they could have an adverse effect on margins.
ChatGPT-4 also pointed toward the firm’s innovativeness when it comes to relevant technology and continuous production growth as very good indicators of things to come.
On the other hand, the singular factor the AI identified as entirely detrimental – the current market conditions with high interest rates and lower consumer spending – was only touched upon and not elaborated on.
Despite the broadly positive analysis of Tesla’s operations, ChatGPT-4 forecast stagnation for TSLA shares throughout the rest of the year as it settled for a price target between $190 and $220 for December 31, 2024 – a range that is, on both ends, close to the stock’s Friday, March 1 closing price of $202.64 that the AI used as the basis for the prediction.
ChatGPT-4 argues a bull and a bear case
Given how conservative in its primary assessment ChatGPT-4 was, the AI was also asked to make a strong bull case and a strong bear case but to keep both plausible.
When arguing the bull case, OpenAI’s most advanced model focused on Tesla’s innovative edge and market leadership and pointed toward possible expansion into new countries – as exemplified by the EV maker’s negotiations with the government of India.
ChatGPT-4’s bullish price target stood between $280 and $300.
On the other hand, in the bearish scenario, the AI pointed toward rising competition in the sector, as well as its vulnerability in case of a bigger economic downturn, at Tesla’s checkered operational history, as well as possible supply chain disruptions – a particularly relevant point given the situation in the Red Sea.
Following this analysis, ChatGPT-4 settled for a range between $150 and $170.
Finally, given that its strong bear case placed Tesla stock no lower than $150, ChatGPT was asked about the current lowest 12-month price target for the EV maker – $23.53.
The AI was quick to respond that the very low estimate stems from a rigorously researched forecast of a scenario in which Tesla faces a highly specific set of heavy setbacks simultaneously, while his own assessment assumed more general severe hardships rather than a collapse.
TSLA stock price chart
While accurately predicting Tesla stock’s performance throughout the rest of 2024 is challenging, it is far less difficult to see that the company has, despite ongoing issues in the industry, been managing to keep its head above the water.
For example, while TSLA shares saw major rallies and major declines over the previous 12 months, the end result of the last 52 weeks of trading has been stagnation, as they are 0.59% in the green.
This year has, however, been more decisive, and Tesla stock is down a full 21.52%, though the more recent trend has been positive, with the EV maker rising 7.68% in the last 30 days.
Still, the market’s open on Monday, March 4, showcases that the sector, along with Elon Musk’s company, is still facing hardships and uncertainty, and TSLA declined 4.19% in the first hour of trading and fell to $194.14 by the time of publication.
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