Tesla was a trillion-dollar stock most recently in April, but it has lost over half of its value since. Amidst economic downturn and increasing competition in the electric vehicle sector, some analysts are questioning whether or not Tesla could become a trillion-dollar stock again in the future.
Above: The Tesla lettering on a Supercharger. (Image: Paul Steuber / Unsplash)
The trillion-dollar stock club currently only belongs to Apple, Microsoft and Google-parent company Alphabet, according to a report from The Motley Fool. Since holding the title in April, Tesla’s stock has dropped in value by more than 60 percent, and bulls and bears both have their own versions of what the tech-forward automaker’s future could hold.
Tesla is largely responsible for bringing the electric vehicle into the public eye by introducing the Roadster as a potential option for buyers with sufficient battery range, speed and acceleration. Now the company has a full lineup of somewhat-affordable EVs for consumers, causing most legacy automakers to start scrambling to catch up.
Legacy automakers are beginning to catch up, though Tesla still held a whopping 64 percent of the EV space’s market share by the end of Q3. Although that will slowly drop as more and more EVs become available to consumers, as evidenced by a drop from 75 percent in the first quarter, Tesla may be well-poised to handle the oncoming wave of new EV options.
In 2022, Tesla has sold 347,000 Model 3 and Model Y vehicles combined, outpacing the Ford Mustang Mach-E’s 28,000 units sold. Tesla’s vehicles make up four out of six of the EV industry’s current best sellers, including the Chevy Bolt with just 22,000 units sold.
Some think GM and Ford could surpass Tesla’s EV market share, including analysts at Bank of America. Tesla’s market share is currently projected to fall just 11 percent in North America by 2025, and onlookers predict EVs to represent around 10 percent of all cars in just a few years. Additionally, Tesla’s affordability is lacking compared to some of its legacy automaker-built rival
Although Tesla’s stock would need to triple in value to hit a one-trillion-dollar valuation again, it certainly isn’t out of the question according to The Motley Fool’s Rich Duprey. Emphasizing the long term, Duprey notes that Tesla still has “plenty of opportunity for growth,” adding that investors may need to wait several years if they hope to see a trillion-dollar value unfold.
Source: The Motley Fool