Tesla Motors CEO Elon Musk said that after the projections according to the latest earnings, Tesla shares could be worth $700 billion by 2025, up from a current market cap of around $27 billion. This is a bold prediction made by the man who is also the chief product architect of Tesla and we should take it seriously for he knows what is in stored for the next decade.
If we take up Elon on his word, the forecast presumes consistent sales growth of 50% annually, a 10-percent profit margin and a stock valuation equal to 20 times yearly profit, which is absolutely big. The company previously pointed to an annual sales goal of 500,000 units, with the necessary 'gigafactory' battery plant running at full capacity by 2020.
Also Read: Tesla Plans Gigafactory in Nevada
So, for Musk to achieve that target Tesla sales need to increases by 50% a year for the next decade which is a big expectation considering that Tesla caters to a niche segment. The company is set to report $6 billion in revenue according to forecasts, so a 50% growth would take them to $346 billion in the next ten years.
Musk wants to double this figure and this speaks enormously about the scale of growth he is expecting for Tesla. For Tesla to get to nearly $350 billion in annual sales the concentration would have to be selling cars and that means selling millions of them which again is a big task.
We all know that Musk is an engineer, entrepreneur, investor and an inventor and has been at the forefront of innovation. It all began with Zip2, which Compaq took an interest in. Ofcourse his innovations went beyond this planet with his space exploration technology and that was the beginning of SpaceX. We also cannot forget that it was Musk who was behind the idea of Hyperloop, which was a new form of public transportation and the summation of it all was to make travel faster at a low cost.
Tesla Motors too recently opened its arms to share technologies with other manufacturers and that has indeed given a big boost to the growth of the electric car. However, it is Tesla who is hoping that its mass-market car, the Model 3, will make a lot of difference and help in achieving the projected growth.
