Tesla has been facing some serious challenges in 2023. In fact, one could argue that the company's fundamentals are weaker now than they were at the start of the year.

For starters, revenue growth has slowed dramatically. In the third quarter, sales were up by just 9%. That's a long way from the growth of 71% and 51% posted in 2021 and 2022, respectively. Softer demand amid higher interest rates naturally gets in the way of consumers wanting to buy new cars, as their monthly payments increase and things become less affordable.

Making matters worse, competition in the industry is only going to intensify. There are many other car companies out there working on their own EV product line-ups. And this won't make things easy going forward. From a customer's perspective, Tesla isn't the only choice anymore.

Therefore, it's no wonder that the company has implemented numerous price cuts throughout 2023 with the intention of driving demand and maintaining market share. The results of this strategy haven't been encouraging. In the last four quarters, Tesla's gross margin and operating margin have both contracted on a consecutive basis.

It's hard to envision a scenario where the stock does well in 2024 without the business showing signs of improvement. If Tesla is able to register accelerating growth more in line with historical levels, while at the same time stabilizing its margins, then I think shares are likely to do quite well next year.