Tesla‘s (NASDAQ:TSLA) stock price has performed exceptionally well since its IPO in 2010. Despite scepticism from industry leaders in its early days, the EV stock has managed to surpass many expectations over the years. And early investors have been well rewarded for their patience.

With a market capitalisation of nearly $650bn, the electric car manufacturing company has become one of the most valuable businesses, worldwide. And now that governments around the globe are pursuing new legislation to reduce carbon emissions, Tesla and its stock seem to be in the prime position to enjoy a lot of growth.

The path towards industry dominance

The electric car manufacturer is escalating its business and increasing the interest of the consumers simultaneously. The latter is of particular interest since a sizeable contributing factor behind the slow adoption of electric vehicles is the lack of charging infrastructure.

Recently Tesla has been continuing to expand its reach and subsequently viability of electric vehicles following the completion of a new supercharging network in Norway and Germany.

Problems in China

China is the second-largest electric vehicle market in the world, according to IEA Research. In order to for Tesla to become an established global leader, I believe it’s imperative that Tesla captures some of this market. But recently, its performance in that region of the world has been quite poor, while its leading competitor NIO has begun stealing market share. So it’s not surprising to see Tesla’s stock suffer as a consequence.

Tesla’s monthly orders from China have undergone a colossal drop, of almost 50%, in May alone. In addition to this, the company is now facing safety investigations and has even had to begin recalling some of its vehicles. That’s not something I like to see in a growth stock.

What’s next for Tesla and its stock price?

2020 has been an impressive year for Tesla and its stock price. While most companies were struggling to deal with the ongoing effects of the pandemic, Tesla’s share price was gearing up for a sky-high journey. And over the course of the year, the stock exploded from $86.05 per share all the way to $705.67! That’s a 720% increase.

But it hasn’t been without its worrying moments. CEO Elon Musk is an avid Twitter user whose tweets have influenced the stock price. Last year, a single tweet wiped $14 billion off the company’s value. As a result, regulators and investors were both agitated. And not for the first time. In fact, the billionaire has been fined multiple times for such behaviour in the past. But regardless, under his leadership, the company became profitable last year for the first time.

All things considered, even with the growing threat from other leading auto manufacturers, I believe Tesla can become the industry leader. And therefore, I would add this business to my portfolio.