This Tesla (NASDAQ:TSLA) stock has been on a roll lately, hasn’t it? As I look into my crystal ball for 2024, there’s a lot to think about for potential investors in this EV powerhouse. Let’s take a closer look.

Another crazy year

The average analyst thinks Tesla’s share price will hit $211.46 in the next 12 months. Keep in mind that opinions are quite mixed. The most cynical are predicting $85, while the most hopeful are aiming for $310. It’s worth noting that at around $211.75, the current share price is in line with the average forecast. So has the market already made a mistake?

Looking further ahead, to the end of 2024, I think there’s a good chance the stock will rally. As production ramps up in recent factories around the world, those vital profit margins should gradually improve.

CEO Elon Musk’s focus on AI and robotics has the potential to redefine the company’s future. He often urges investors to think of the company not just as an automotive company, but as an AI-robotics company.

Management expects the robot taxis to hit the roads next year. It also plans to produce several thousand of its recent robots for internal employ.

However, while these innovations are promising, the timeline for them to turn a profit remains uncertain. Management has a history of missing deadlines, such as the delay in the launch of the Cybertruck. It’s a reminder that investors should always temper expectations.

Competition is clearly heating up in the electric vehicle sector, with established automakers and bold start-ups entering the market. We also can’t ignore the bigger economic picture – if inflation and interest rates remain uncertain, people may think twice about spending money.

We’re already seeing the results of that uncertainty. Deliveries fell 8.5% year over year in the first quarter of 2024 — the first such decline since 2020 — followed by a 5% decline in the second quarter. Management warned that vehicle volume growth in 2024 will likely be lower than in 2023, citing efforts to bring next-generation vehicles to market, macroeconomic uncertainty and a slowdown in demand for electric vehicles.

I’ll also be keeping a close eye on Musk’s controversial opinions as the U.S. general election approaches. Many fear his divided opinions will negatively impact the business, as they have sometimes dragged stocks down in the past.

My best guess

With all that in mind, I think the stock could end 2024 somewhere between $250 and $300. That would represent a solid 20%-40% gain from current levels.

Of course, that’s just my best guess. The company is clearly a bit of a nonconformist, and its stock price is known for zagging when everyone expects it to. The high valuation — with a price-to-earnings (P/E) ratio of 51.9 times and a price-to-sales (P/S) ratio of 6.7 times — means it will have to keep delivering the goods to justify its higher price.

A bumpy road

So for those tempted by Tesla, I would always suggest preparing for a bumpy ride. The company has proven its ability to deliver impressive innovations, but the market can sometimes see beyond that. Controversy and media hype can make many current or potential investors nervous. But I will hold onto my shares for the long haul.