Tesla stock (NASDAQ: TSLA) has taken a different trajectory compared to its “Magnificent Seven” peers, declining by 20% in 2023 as of February 16th. The company’s weaker sales and margins, coupled with macroeconomic uncertainty, have led investors to lose some confidence.
Despite recent setbacks, Tesla remains an industry innovator and disruptor in the electric vehicle (EV) sector. Over the past decade, Tesla shares have surged by an impressive 1,410%, outperforming the Nasdaq Composite index.
Predicting where the Tesla stock will be in the next 10 years is a matter of debate. The company, under the guidance of its well-known founder Elon Musk, has transformed the automotive industry by introducing elegantly designed and technologically advanced cars. Tesla achieved remarkable growth in 2023, generating $97 billion in total revenue and producing over 1.8 million cars, placing it firmly at the forefront of the U.S. EV market.
A notable contribution to Tesla’s revenue in 2023 came from the energy storage and generation sector, accounting for $6 billion, a 54% year-over-year increase. This includes revenue from solar panels and battery packs.
If Tesla continues to operate on its current trajectory without any major changes, it is expected to derive the majority of its future revenue from electric vehicles, much like it does today. This will come from existing models, as well as new additions such as the Cybertruck, the affordable “Redwood” design priced at $25,000, and the reintroduction of the Roadster.
However, considering the nature of the economy and the tech sector, it is highly likely that Tesla will undergo significant changes in the next 10 years. The company is investing resources and effort into developing its Dojo artificial intelligence (AI) supercomputers to enable full self-driving capabilities. Should Tesla succeed in this venture, it plans to launch a global fleet of autonomous “robotaxis,” transforming its vehicles into high-margin money-making machines.
Additionally, Tesla is venturing into the robotics space with the development of the Optimus humanoid robot. This move aims to boost manufacturing output by replacing certain tasks performed by humans. By selling these robots to other companies, Tesla could emulate the successful revenue-generating strategy used by Amazon with its logistics footprint and Amazon Web Services (AWS).
Despite Tesla’s innovative approach and disruptive potential, the future of the company remains uncertain, particularly over the long term. Attempting to predict the trajectory of technologies that do not exist or lack market adoption today would be purely speculative.
Although Tesla’s stock currently trades 51% below its peak price, with a price-to-earnings ratio of 46.4, there are potential challenges ahead. The next 10 years may prove more challenging than the previous decade, given the possibility of higher interest rates and increased competition within the industry.
Considering these factors, it would not be surprising if Tesla’s stock performance aligns with the overall Nasdaq Composite index between now and 2034.
In conclusion, while Tesla remains a highly innovative company, the future of its stock remains uncertain. Investors should carefully evaluate the potential risks and rewards before making investment decisions.
Disclosure: John Mackey, former CEO of Whole Foods Market and an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Tesla.
