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Elon Musk Thinks Tesla Will Become the World's Most Valuable Company, but This Glaring Problem Could Instead Lead to a 70% Plunge
TSLATesla(TSLA) The Motley Fool·2025-04-06 08:30

Core Viewpoint - Tesla's stock performance is under scrutiny due to declining electric vehicle (EV) sales, despite optimistic long-term projections from CEO Elon Musk regarding future products like autonomous vehicles and humanoid robots [3][8][13]. Group 1: Stock Performance and Market Position - Tesla's stock gained 63% in 2024, partly due to political factors, but has since dropped 41% from its December peak [1][3]. - The company has a market capitalization of 886billion,significantlyhigherthancompetitorslikeToyota,despiteselling83886 billion, significantly higher than competitors like Toyota, despite selling 83% fewer cars [8]. - Tesla's current price-to-earnings (P/E) ratio stands at 130.9, making it four times more expensive than the Nasdaq-100 index [14]. Group 2: Sales and Competition - Tesla's EV sales declined by 1% in 2024, delivering 1.79 million cars, contrary to Musk's previous growth expectations of 50% per year [5]. - In the first quarter of 2025, Tesla delivered 336,681 EVs, a 13% decline year-over-year and below Wall Street's expectations [6]. - Competitors like BYD are gaining market share with lower-priced models, such as the Seagull EV priced at 10,000 [4]. Group 3: Future Products and Projections - Musk envisions Tesla's future products, including the Cybercab and Optimus humanoid robots, could significantly increase the company's valuation, potentially reaching 8trillionby2029[10][12].−TheCybercabaimstoestablisharide−hailingnetworkusingTesla′sfullself−drivingsoftware,whichisnotyetapprovedforunsuperviseduse[9].−Muskpredictsthathumanoidrobotscouldgenerate8 trillion by 2029 [10][12]. - The Cybercab aims to establish a ride-hailing network using Tesla's full self-driving software, which is not yet approved for unsupervised use [9]. - Musk predicts that humanoid robots could generate 10 trillion in revenue over the long term, with production plans for thousands of units starting in 2025 [11][12]. Group 4: Financial Implications - Tesla's earnings per share (EPS) fell by 53% to $2.04 in 2024 due to declining EV sales, raising concerns about future financial performance [13]. - If current trends continue, Tesla's stock could face a significant decline, potentially dropping by 70% to align with industry peers [17]. - The company must stabilize its EV business before its future products can contribute to revenue, facing challenges from brand perception and competition [16].