Can the Tesla share price break more records in 2022?

Last year was one of records for the Tesla (NASDAQ: TSLA) share price and the electric vehicle (EV) company itself. Not only did the stock surge to an all-time high and break the $1trn market value level, but the corporation also smashed its production records. 

According to the firm’s latest figures, the group delivered 308,600 vehicles in the fourth quarter, far higher than forecasts, which were calling for 263,026 vehicles. Deliveries were up about 70% year-on-year in the fourth quarter. On an annual basis, deliveries rose 87% to 936,172 in 2021.

The EV maker defied all expectations last year. Despite the global chip shortage and supply chain disruption, the company’s output jumped nearly 100%. The question is, can the firm continue this run in 2022? 

Tesla share price outlook

Tesla is a fascinating business. Unlike many other companies, the firm does not have to work at generating demand for its products. The group’s EV’s are some of the best-known and most sought-after on the market. What’s more, the brand has become synonymous with EVs in general. 

As such, the group faces ever-growing demand for its output, and it is struggling to meet demand. This is a great problem to have. Tesla now has to match that demand. 

So the biggest challenge will be ramping up output. The next will be ramping up output profitably. There is no reason to suggest the group cannot meet both of these objectives. 

Indeed, it has been quite successful at both increasing output and moving to a profitable position over the past 12 months. As new production facilities open over the next year or so, it should be able to ramp up output. 

If the company can continue on this course, I think the Tesla share price could break more records in 2022. It could continue to push to new highs along with rising profits and output. 

Challenges ahead

However, this is far from guaranteed. The firm could face challenges, including supply chain disruptions, labour disputes, and competition. While Tesla’s brand has helped it pull in the customers up until this point, its peers are ramping up their EV offerings. I think it is likely that, sooner or later, they will start to edge in on the group’s turf. 

Another factor to consider is the company’s valuation. Compared to its traditional peers, the stock looks incredibly expensive. Some analysts may argue that the group’s valuation is justified. After all, it has completely transformed the EV industry. Nevertheless, a high valuation leaves a lot of room for a correction if the enterprise starts to stumble. 

Considering all of the above, I am cautiously optimistic about the outlook for the Tesla share price in 2022. That is why I would buy it for my portfolio. I think the stock can continue to break records if it does not disappoint investors.