For all but perhaps cryptocurrency investors, the dramatic rise in electric-vehicle maker Tesla (NASDAQ: TSLA ) simply confounds. On a year-to-date basis, Tesla stock is up nearly 82%. Obviously, with the year being so young, the move raises eyebrows. But given that apparently so many people are buying into the extreme rally, is there substance to this sharp swing?

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I highly doubt it. One of the explanations is that Tesla stock is responding vigorously to a far-fetched mergers-and-acquisitions rumor. According to a Forbes article, Alphabet (NASDAQ: GOOG , NASDAQ: GOOGL ) may be in the market for buying out TSLA. After all, the internet and technology giant has been developing Waymo, a self-driving taxi. From Barron’s contributor Al Root:

The price paid, according to the speculation, would be $1,500 a share, or $270 billion. And the value ultimately realized by Google could be $1.5 trillion. That’s more than 10 times higher than today’s valuation and, in theory, makes Tesla the most valuable publicly traded company in America.

It’s hard to imagine that Alphabet would pay such a rich premium for Tesla stock. Although Waymo features many exciting innovations, it’s not the parent company’s biggest moneymaker. For what is essentially an experimental unit — Alphabet’s “Other Bets” category rang up only $659 million in 2019 –the proposed price tag is too much.

Besides, there are many other reasons why Tesla stock has gone bonkers. Here are three of them.

Coronavirus Impact to Tesla Stock Not Fully Appreciated

When the coronavirus from China first made headlines, many analysts urged investors not to panic. As history demonstrates, all viral outbreaks eventually fade. I don’t see evidence to suggest that the coronavirus is any different.

But what I also see is that this epidemic is far worse than any other mass health-related scare in years. Based on the latest update from the New York Times, the coronavirus has infected 42,638 and killed 1,016. Please note that in the day prior to the time of writing, the infected tally was 40,171, with 908 deaths.

Last month, the Chinese government forced the temporary closure of Tesla’s Shanghai-based factory. Additionally, other American companies doing business in China, such as Apple (NASDAQ: AAPL ) and Alphabet have closed their offices.

Just recently, Shanghai’s municipal government stated that it would help companies like Tesla resume their operations. That’s wonderful, but here’s the problem: Shanghai is also racing to build medical facilities to house and care for the city’s coronavirus-stricken patients.

Further, the New York Times reported concerns that the coronavirus may have spread from different floors in one Hong Kong apartment building. If that’s the case, experts worry that the virus could be transmitted through the air.

Thus, there’s a real possibility that some Chinese government agencies are giving the go-ahead prematurely.

EVs Are Not Profitable

When you look at car manufacturers from General Motors (NYSE: GM ) to Toyota (NYSE: TM ) to embattled organizations like Nissan Motor (OTCMKTS: NSANY ), they are consistently profitable. Even Ferrari (NYSE: RACE ), which traditionally didn’t place much emphasis on their non-racing machines, is profitable.

On the other hand, EVs are not profitable. Even Tesla with its impressive deliveries has not been a consistent money maker. It’s unlikely that this platform will get there soon due to the economics of this technology. According to Los Angeles Times columnist Russ Mitchell:

It costs manufacturers more to produce an electric car. Battery cost is the main reason. Internal combustion powertrains cost automakers an average $6,500 per car, according to AlixPartners; the average for an EV is $16,000. Battery pack prices are declining, the firm said — but at a rate of 4% a year. It will take a major development in battery technology to cause battery prices to plunge. In the meantime, EVs are money-losers for all major automakers, including Tesla.

In other words, it makes far more sense in the current automotive paradigm to make improvements to combustion vehicles than to make the wholesale switch to EVs. Fact is, automakers have tried that and they’re getting their hind end handed to them by Tesla.

Initially, that might appear a positive for Tesla stock. However, traditional automakers – through their vastly superior economies of scale – can make more compelling improvements to combustion vehicles and at more attractive prices than Tesla can achieve.

That makes TSLA stuck in their lane because the incentive to overhaul infrastructures to accommodate EVs declines precipitously.

Tesla’s Growth Path Is Limited

Even if the coronavirus has zero net impact on Tesla stock and if the company somehow manages to drastically improve their profitability narrative, there’s another unavoidable headwind to consider: the adoption rate for EVs is limited.

For one thing, charging an EV takes considerably longer than refueling a combustion vehicle. Thus, you really need a garage to conveniently enjoy electric transportation. This of course eliminates people who live in apartments or who street park their cars.

It also eliminates consumers who live in dense, urban areas where just a parking spot comes at a premium. This is one of the reasons why I’ve been skeptical about Nio (NYSE: NIO ), where many big Chinese cities were built to house people, not cars.

Now, Tesla has done a superb job of addressing “range anxiety,” or essentially the fear of being stranded. Their EVs have significantly improved ranges, which actually make them ideal for many urban areas due to accommodative infrastructure.

However, that doesn’t help people who live in rural communities or who make long, daily commutes where EV infrastructure is not readily available.

And I’m not being a negative Nancy about this. When you look at EV sales by state, California represents the lion’s share of sales. I’m not surprised. When you look at factors such as infrastructure, housing characteristics, even the weather, the Golden State is very accommodative to EVs.

But from a business perspective, you want to see revenue diversity. Right now, the technology to realize this diversity isn’t quite there.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.