In the weeks, Donald Trump’s victory on November 5 achieved that Tesla’s shares enjoyed one of the most explosive bikes in the allegations of the shares circulated publicly, with more than 50 % and a half trillion dollars in the evaluation within slightly over one month. This increase reflected four years of the weak performance of the Tesla shares, as investors were tense in weakening the basics of the EV maker, serial promises of the executive director of Elon Musk for self -driving cars and an inexpensive collective market model that has proven to be a permanent horizon.
Then, in October, Musk recharged its store through a new pledge to start producing the long -awaited length Timing Cybercab, by mid -2015. Investors believed that the new Musk mode, whose title is topped as the highest highest in the Economic team Trump in the Presidency of the Ministry of Government efficiency (DOGE), as well as his BROM with his boss, will somehow back on Tesla. Musk seems to be an unprecedented coup in taming the federal bureaucracy. He reminded his early victories in the White House people and money from the magic of supposed musk, and renewed faith in his epic vision of the EV giant.
But in the past ten weeks, Musk launched the controversy in Europe now that it is the center of the car riding in the Trump administration, especially by supporting the extreme right -wing political parties, as well as the terrible news from China, crushed Tesla shares, and sent their prices to where they were ignored for investment, where they ignored them for investment, where they ignored them, where they investigated the ignorance. The value of the rocks as a dense capital industry company-and consider whether the musk gauze promises are the things that justify the distance of the market hat that is still an identity.
In fact, it appears that the mathematics dictating the tournaments that Tesla should perform to provide good returns from here is impossible to achieve. So let’s explore the value of the company as a car maker and electric batteries and separate what we call Music Premium, the maximum additional market granted to “expected” projects failed to provide it, but it is still a legions of believers.
We will start by asking the highest question in American works: What will Tesla deserve without Elon Musk?
Calculate the value of Tesla on what it does now
To answer this question, this writer used traditional instructions to reach an accurate evaluation based on the products and services it produces and sells Tesla currently, and don’t predict MSK Wonders. To create repetitive and permanent profit numbers, I have canceled special items, especially the $ 589 million writing for Bitcoin on Tesla books that are allowed by new accounting rules, and the 6 billion dollar tax benefit in the fourth quarter of 2023.
Using this template, Tesla has published basic profits of $ 4.2 billion in 2024. To create the maximum reasonable market, we first need to determine the price ratio to profits (P/E). For the 10 largest car manufacturers outside China, a group that includes Ford and Gres Motors in the United States; StelantisMercedes -Benz, BMW, and Volkswagen In Europe and Toyotaand Hyundaiand AprilAnd suzuki in Asia, the average is 6.9; Only Nissan Beaks are two numbers in 15.1. However, a huge share of Tesla sales flows from China, the world’s fastest market in the world to a large extent, and Chinese players wearing higher complications than anywhere else, often 20 or higher. So we will give Tesla P/E out of 20, which is still three times the standard for automobile companies outside the world.
Hit $ 4.2 billion in $ 20 and get a maximum market of $ 84 billion. But Tesla’s evaluation from mid -Monday, 3 March, amounted to 955 billion dollars. Then it is sold at 227 times from its latent profits in 2024 (the maximum of 955 billion dollars divided into profits of $ 4.2 billion) – after a historic sale. These modified profits, by the way, are less than $ 11 billion, using the same scale, recorded by Tesla in 2022. This tyrant growth is actually shrinking as a profit maker. Investors invest a lot of the value centered on great expectations that Musk will register on Robotaxi fleets, and FSV software sales for the current Tesla owners so that they can operate their cars such as UBERS and Lyfts owned by customers when they do not drive them. “Musk Sorcer” is the difference, which is amazing $ 873 billion (the maximum of $ 955 billion is the current situation in Tesla of $ 82 billion).
Of course, Tesla is the most dangerous stock, as it is clear from its wonderful plan since the elections. Investors will want at least 10 % annual return to connect themselves to ride a trip. Since Tesla does not pay profits, reaching this number will require twice the price of its share in seven years, from 282 dollars to about $ 564. We will assume that the number of shares remain at the levels of today. In this scenario, the market cover will also include wax, reaching $ 1.91 trillion by early 2032.
Fast seizure of Scotch. We need another assumption to put the goal of net profits seven years from now, which is the “end” P/E. We’ll put the number in 30 years, much higher than the S&P Multidecade average, and a sign that still places the Tesla brand as a nomad of relative technology even after organizing one of the fastest expansions it has ever. The profit ghost of 2023 was 64 billion dollars, the rating of $ 1.91 billion divided into P/E of 30.
Tesla cannot justify her current evaluation
The “target” of $ 64 billion, with profits 15 times from $ 4.2 billion today in the seventh break. This is a 15 -time jump; Tesla’s profits after tax deduction will need to increase at a compound rate of 47 % annually. If Musk succeeds from worshipers to drive Tesla to anywhere near its climax in December, the future profit growth bar becomes more passionate and cannot be done. The average annual profit increases in assessing the top of $ 1.57 trillion: 60 % per year. The more impossible followers of musk, the more impossible the challenge they face.
Rubing is that when Tesla needs a enhanced missile, its engines fade. Last year, its total basic revenue from the auto industry increased 200 million dollars or 0.2 % over the course of 2023, which means that it has already decreased on two points that were adjusted to inflation. This year began badly: in January 2024 compared to the same amount last year, revenues fell 50 % in Europe and 11 % in China.
Musk may succeed in making Tesla a much larger institution by launching fleets of robots for the Uber and Waymo match, making and selling FSD programs for their current owners. But acquiring size is not enough. It will take both the new capitalist investment and huge returns on all the pants of musk in new projects to look at the century. It is not clear that Tesla can make adequate profits on its own to finance the musk scheme. If not, it will have to sell the shares and raise debts. The higher the number of external cash, the more strictly becomes its task: with the growth of the shares, the total profits that exceed 64 billion dollars are required to strike the share price of 15 times by 2032, which is the requirement to hand over the annual gains less than 10 %. Musk must secure huge return rates on these investments, and they are funded internally and if necessary externally, to supply the built -in Quicksilver profit slope at the share price.
Here lies the imagination. While Musk poured tens of billions in the construction of Tesla -owned robots and obtaining the data center equipment to operate the mobility equipment in FSV fleets, he will face a lot of competition from players who publish artificial intelligence and spread it for prosperity in the same complete future projects. This competition will press its margins, and the budget wheel, which actually claims to continue to spin, slows down: the wonderful profitable products that generate money from cash to spawn and make more profitable products wonderfully. Musk recently claimed that Tesla could rise in profits 10 times in the next five years. He is right to compensate for what it will take to reward the shareholders. It does not show many signs to get there.
While Musk attacks “fraud, waste and abuse” from his body in the White House, it is short in showing concrete evidence of vegetable floors in Austin, Berlin and Shanghai that he launched a reliable plan. The American “music man” still gets a huge Musk magic, an Oscar -deserving premium for Tesla shares. While musk attacks the ills of the American economy, Tesla’s problems continue to grow.
This story was originally shown on Fortune.com
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2025-03-08 12:00:00
