How low can Tesla (NASDAQ:TSLA) stock go?

So far in 2022, TSLA stock has pulled back nearly 40% to $724 and change per share.

The stock is well below its 52-week high of $1,243.49. The company is facing a number of issues that are weighing on both its future prospects and share price.

Among the more pressing issues for TSLA stock are renewed Covid-19 lockdowns in China (a key global manufacturing center), deteriorating economic conditions and rising competition.

The last several months have also exacerbated oncerns over the leadership team’s focus in the wake of chief executive officer Elon Musk’s very public $44 billion bid to acquire social media giant Twitter (NYSE:TWTR).

New Ventures and TSLA Stock

While TSLA stock has been softening all year, it fell precipitously once Musk publicly offered to buy Twitter on April 14.

Analysts criticized Musk’s bid for Twitter and openly questioned whether he would be able to keep his focus on Tesla going forward as he tried to complete the purchase of the social media company, take it private, and then turn it around.

It should be noted that in addition to Tesla and Twitter, Musk also leads two other privately held companies: SpaceX, which is focused on commercial space transportation and satellites, and The Boring Company which is focused on tunnel construction and developing subway and other transit systems.

Any one of these companies would be a lot for a CEO to successfully run. That Musk could end up running four major companies involved in cutting-edge technologies at the same time, including Twitter, has some analysts shaking their heads in disbelief.

Investors appear to be growing concerned about the future direction of the electric vehicle maker as Musk’s attention wanders and he increasingly engages in online battles.

The Tesla head honcho has been sparing with Twitter’s leadership team over how the social media company is run even as he tries to buy it.

Musk also recently drew criticism for saying in a social media post that remote work is no longer acceptable. If Tesla employees don’t want to return to work, he said, they should “pretend to work somewhere else.”

Growth and Competition

Elon Musk’s ambitions and controversies aside, Tesla continues to grow and has had some notable wins this year.

In late March, the company opened a new manufacturing plant outside Berlin that should be producing 10,000 electric vehicles per week by the end of the year. That gives the company a bulkhead in the European automotive market.

In April, the company issued its first-quarter production numbers that showed it delivered 310,000 electric vehicles in the January through March period, which is an all-time record for the company.

TSLA stock beat Wall Street’s expectations across the board, in its recent earnings report, including record automotive margins of 32.9%.

The company will need to keep its foot on the gas if it wants to retain its crown as the world’s biggest electric vehicle maker.

Tesla faces intense and growing competition from deep-pocketed and established rivals such as Ford (NYSE:F), General Motors (NYSE:GM), Toyota (NYSE:TM) and Volkswagen (ETR:VOW3).

All of those companies are pushing hard into electric vehicles and have made no bones about wanting to challenge Tesla for supremacy in the space.

With the global EV market forecast to be worth nearly $1 trillion by 2030, there’s a lot at stake and Tesla will have to remain in overdrive to continue lapping the competition.

Wait on TSLA

Tesla remains an interesting and exciting company. It continues to dominate the worldwide market for electric vehicles, but for how long?

Competition is rising and it’s not clear if Tesla will remain on top. That company CEO Elon Musk’s attention is fragmented and he continues to generate controversy is not good.

Neither is Tesla’s valuation. Even though the TSLA stock price has been brought lower this year, it still trades at a sky-high price-to-earnings ratio of 105.

Weighing all these considerations, investors would be smart to wait and see where Tesla ends up over the next six to 12 months before taking a position. TSLA stock is not a buy.

Disclosure: On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.