The most talked-about stock in autos had a very good run in 2017: Shares of upstart Silicon Valley automaker Tesla, Inc. (NASDAQ: TSLA) ended the year at $311.35, up 45.7% from its close on the last trading day of 2016.
Continue Reading Below
What drove that run-up? Tesla's stock has always been volatile, but I think we can look to the company's biggest news of the year for the explanation: the launch of its long-awaited Model 3 sedan.
The Model 3 is Tesla's first "affordable" entry, a compact four-door sports sedan with a starting price of $35,000. More than that, it's the car upon which Tesla investors' hopes are pinned, the model that could turn Tesla from a niche maker of expensive electric luxury cars to something more like a mainstream high-volume automaker.
But the road to getting the Model 3 into full production has been a bumpy one for Tesla. It's no surprise that the stock also had a rough ride in 2017.
There were serious concerns before the Model 3's midyear launch: Would Tesla really be able to deliver on its promises for the car? The stock jumped after those concerns were allayed, but it's had an up-and-down ride since as the company has visibly struggled to get its much-ballyhooed high-speed assembly line running at faster than a crawl.
Tesla began 2018 by resetting its guidance for Model 3 production: It's now hoping to get its production line building 2,500 cars a week by the end of the first quarter and 5,000 a week by the end of the second quarter.
If it is forced to reset those goals again, that could give Tesla's stock another rocky ride in 2018.
10 stocks we like better than TeslaWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Tesla wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018