Investors who like to try to develop a good puzzle certainly have to work Tesla (NASDAQ: TSLA). The price of Tesla has increased 48% from April. Despite these good results, there is still 19% below where the year began.

This type of variability would be noteworthy even in a diminutive company with low market capitalization. But Tesla is a technological giant, which, even after losing almost one fifth value from the beginning of the year, can still boast of market capitalization in the amount of over 1 %. For this enormous company, such price variability is amazing.

What is happening – and can this present to me the possibility of adding an electric car manufacturer to my portfolio?

Valuation detached from scratch

There were several reasons to be hopeful about financial perspectives for Tesla this year. For example, activities in the field of energy production and storage shoot at all cylinders. Taxi attempts in the US are expanding.

But there were many questions about where the company is going on, on the increasingly complex market.

Competition of electric car manufacturers, such as Hunter AND Xiaomi They expanded at a pace. Tesla not only recorded a decrease in car sales in the first half of this year, but also the loss of American tax breaks, which previously helped to boost its profitability.

Meanwhile, although independent attempts at Tesla taxi are expanding, I think rivals, including AlphabetWaymo has the same or even more right to win on this market as Tesla.

While Tesla has only recently started rehearsals in one city in the USA, Waymo already has commercial self -service taxi services in this city and six others.

Despite these challenges – and the risk that falling sales may fall this year – the price of Tesla shares is 182 – times of current earnings. It looks absurd to me, taking into account the company’s basic financial results.

I don’t do anything yet

What can explain the irregular movement price movement?

I think that the jump from April reflects some calming the fears caused a few months ago in terms of the potential influence of American tariffs on Tesla’s activities.

But although this risk could decrease (in practice, I still think it is too early to say), Tesla still faces a very complex environment on many fronts. This can partially explain why the price of Tesla’s action has fallen by about one fifth so far this year.

Even after this price drop, the action still looks too costly for my preferences. On this basis, although I still see strengths in the Tesla industry and invest in the right price, I plan to do nothing for now.