Image source: Getty Images Electric vehicles (EVs) made by Tesla (NASDAQ: TSLA) are well known for their rapid acceleration. But that is not the only thing about the company that has been gaining speed lately. Tesla stock has jumped 19% since the year started less than three weeks ago. That comes after a period of poor performance. Tesla stock has fallen 61% over the past year. Still, looking at the chart, I wonder if in future we might look back on early 2023 as the moment the EV stock turned the corner and started moving upwards again. Considering that, should I buy some for my portfolio now? Good news and bad news I think the move upwards reflects a renewed burst of optimism from some investors. I see good reasons behind that. In the final quarter of last year, Tesla delivered over 405,000 vehicles to buyers. Deliveries last year showed annual growth of 40%, with production up 47%. Tesla’s manufacturing footprint has expanded, enabling it to keep ramping up output this year. The company’s keenly awaited pickup truck model is currently slated to start rolling off the manufacturing line this year. The end of pandemic restrictions in China could also help the company as it seeks to grow strongly in that market. All of those things could help boost revenues at the company, potentially helping to support the Tesla stock price. But there is bad news too. Rivals are aggressively launching their own EVs. I expect the market to grow strongly in 2023, with Tesla just one player among many. The company has been sharply cutting its selling prices. That could boost sales volumes, but at the cost of revenues — and profitability. Valuing Tesla stock Even if the business does well in 2023 however, that still might not mean Tesla stock has a good year ahead of it. After the admittedly flying start to 2023, Tesla now has a market capitalisation of over $400bn. That is well below its peak. Last January, the company reached a valuation of $1.2tn. The market-cap still looks too high to me. It is almost 100 times last year’s net income. That dizzying price-to-earnings ratio could become even higher if big price cuts lead to smaller profits this year. By contrast, rival Ford has a market capitalisation of $50bn despite making $17bn last year. Admittedly, that was an exceptionally good performance for the old timer. Ford is growing its EV business but I think Tesla has important differences, from its brand to a more focused business model. But the valuation of Tesla stock is still too high for my tastes. Not buying For that reason, I have no plans to add Tesla stock to my portfolio. I am impressed by the business’ phenomenal growth rates and think it has a strong future. But that in itself does not make it a good investment at the current price. Until I feel more comfortable with its valuation, Tesla simply is not a good fit for my investing style. For that to happen, the share price needs to come down, or earnings will need to balloon.

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