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Trefis analysis shows Tesla’s stock could potentially cross $2,000 in 5 years from its current level of $500, as a counter analysis to our Tesla downside case of
Tesla Stock Downside: $0?Tesla will need to scale annual deliveries from about 300K in 2019 to over 2M (comparable to luxury car sales by Mercedes, BMW and Audi), with a trajectory to 5M (comparable to GM and VW). It’s a tough ask, but then Tesla did achieve the uphill task of increasing deliveries from 30k in 2015 to 300k in 2019In addition, for Tesla stock to reach $2,000+, while increasing revenues, Tesla will need to continue to improve its earnings margins, to about 15%Below we discuss the specifics of
Tesla Stock Upside: $2,000?, included with our interactive charts to test sensitivity to underlying assumptions. Deeper insights on Tesla revenues and Tesla expenses as well as Tesla P/S multiple, are also available separately as context to this analysis.
Tesla's stock price has soared from $27 in Jan 2012 to over $500 in Jan 2020
This translates into a CAGR of 44% over 8 years. In comparison, the S&P has returned about 12% a year over the same period.
Tesla Stock Price (in January each year)
Why is it possible for Tesla's Deliveries to jump to 2 million by 2025 and 4 million by 2030?
#1.3 Tesla has been efficient in ramping up production capacityTesla has a fairly solid track record of scaling up production. Deliveries rose from about 2k cars in 2012 to 76k in 2016 and 367k in 2019. Tesla built-out its Chinese factory in a record 10 months and production is expected scale from a run-rate of 250k cars per year by the end of this year to 500k cars. This means that Tesla should be able to build out new capacity and scale-up, as demand for its vehicles increases with the launch of new models such as the Model Y and the Cybertruck.
China Gigafactory Production Capacity
Related AnalysisTesla Revenues: Our base caseCybertruck Could Bring In Over $4.5 Billion In Revenue For Tesla By 2025Sizing Up The Potential Of Tesla's Semi Truck
Related AnalysisHow Battery Costs Impact Tesla's MarginsTesla Vs. BMW: A Detailed ComparisonTesla Expenses: How Does Tesla Spend Its Money?
Why P/E Multiple of 23x in 2025?
While the P/E number the market will assign is based on the alternatives available to investors - here is some data we used to arrive at the potential multiple for Tesla. We suggest that you choose for yourselves:
View our complete set of analyses on Tesla