Tesla (NASDAQ: TSLA) is almost as enigmatic as its CEO, Elon Musk. We should expect breakout growth stocks to hit highs and lows early on, and Tesla is highly volatile.

However, since its 2021 peak, the share price has dropped almost 60%, and the recent trend is down. That’s two and a half years of bearish momentum that may test even the most positive among us.

Falling value

If I had invested £10,000 in Tesla shares two years ago, they would be worth £7,900 today. At 21%, it’s not a gigantic drop. New technology stocks often suffer even more and bounce back stronger.

And if I had gotten in in just a few months, the outcome could have been completely different. In fact, if I had entered the market at the right time in January 2023, I could have already gained 70%.

But the past is gone. What matters is what comes next, and I see a lot of uncertainty. And it all depends on this guy Musk.

Gameplay in Texas

Tesla’s finances are overshadowed by a management crisis. And it’s all because of the boss’s salary.

After banning a planned $56 billion package in Delaware, the company now wants to move its headquarters to the state of Texas. The deal would raise Musk’s stake in Tesla from less than 13% to more than 20%. It requires shareholder approval and the vote will take place in June.

Will the sale be complex? Here’s what Tesla CEO Robyn Denholm said in an interview: Financial times: “It’s like Mount Everest. This is a huge climb because getting 50% of shareholders to vote, let alone what they vote for, is quite difficult“

Next two years

What about the next two years and beyond? Is Tesla still the solid long-term buy it was just a few years ago?

The mercurial Musk has talked about continuing artificial intelligence research beyond Tesla if he doesn’t get his way. And having to guess where the boss’s mood will take him next is not good for shareholder confidence.

China appears to be producing great electric vehicles (EVs). And he sells them at low prices, allegedly thanks to state financial support. The United States has placed massive restrictions on imports, but there is stern competition in other parts of the world.

Still, I would expect Tesla to dominate in the West, with first-mover advantages in batteries, infrastructure, and the overall market.

Looking to the future

I believe that the valuation of Tesla shares is currently attractive and I see a good chance that today’s investment worth PLN 10,000 pounds will do well over the next few years. The price-to-earnings ratio (P/E) is projected to fall to 41 by 2026.

And I rate that as fair for a company with such potential in electric vehicles, artificial intelligence, robotics…

However, everything may depend on the course of the vote in June and Musk’s further actions. To me, that’s a gigantic reason to stay away. At least for now.