Electric vehicle and clean energy company Tesla is currently the 15th most valuable company on the planet, commanding a market capitalization of approximately $559billion.
Of course, many investors are wondering how Tesla will perform over the long term. After all, the electric vehicle market still has substantial room for growth, and Tesla seems to be positioned very well to take advantage of this.
In this article, we will be taking a look at some long-term scenarios for the price of Tesla stock, including a Tesla stock price prediction for 2040 and 2050.
Key takeaways:
- Tesla, currently the 15th most valuable global company with a market cap of $559 billion, faces speculation about its future performance given the expanding electric vehicle market.
- Long-term predictions suggest Tesla stock could hit highs of $3,035 (S&P 500 growth rate) or potentially soar to $8,015 (QTEC growth rate) by 2050.
- Short-term projections indicate potential algorithmic forecasts foresee a downturn, with the CoinCodex algorithmpredicting TSLA at $275 by January 2025, marking a 56.5% increase from the current price.
- Wall Street analysts' one-year forecast varies, with an average target of $207, reflecting a roughly +18% upside. Opinions among analysts lean towards neutral, with recommendations to hold, buy, and sell all substantially represented.
- Despite past challenges, Tesla's stock has recovered impressively in 2023, underlining its solid prospects in the electric vehicle space, contingent on sustaining market dominance amid growing competition.
Here’s an overview of Tesla stock’s price predictions under various relevant growth scenarios.
| 2025 | 2030 | 2040 | 2050 | |
|---|---|---|---|---|
| TSLA stock forecast (5% annual growth) | $184 | $247 | $403 | $656 |
| TSLA stock forecast (S&P 500 historical 11.13% ROI - last 50 yrs) | $195 | $368 | $1,056 | $3,035 |
| TSLA stock forecast (QTEC historical 15.2% ROI - last 18 yrs) | $202 | $473 | $1,947 | $8,015 |
*The values in the table were calculated using TSLA’s price of $175.66 (as of March 21, 2024).
**The S&P 500 has averaged 11.13% CAGRover the past 50years, and NASDAQ's tech-focused QTEC index has averaged 15.2% since 2006.
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Tesla stock price prediction for 2040
Tesla stock’s average annual return for the past ten years has been around 40%. If this average annual return were to continue until 2040, Tesla stock would reach a price of$101,597. Needless to say, this figure seems impossible to achieve, so we need to use a more conservative benchmark to make a Tesla stock prediction for 2040.
The S&P 500 index had an average annual return of 11.13% between 1973 and 2023. If Tesla stock were to grow at this average rate until 2040, TSLA stock would be worth $1,056 in 2040. This would be about 2.5x the stock’s current all-time high price of $407.
Meanwhile, the tech-heavy Nasdaq-100 index has displayed an average annual return of 15.2% between its inception in 2006 and 2024. If TSLA were to grow by 15.2% per year on average, Tesla stock would be worth $1,947. This would be about 11x the current Tesla stock price.
Tesla stock price prediction for 2050
When it comes to the Tesla stock price forecast for 2050, Tesla stock would be trading at $3,035in 2050 if it were to grow at the same 11.1% average rate as the S&P 500.
If TSLA were to grow at the same rate as the Nasdaq 100’s 15.2% average annual return, it would be worth $8,015 by 2050.
Tesla stock price prediction for 2024-2025: Algorithm expects up-and-down movement
When it comes to more short-term predictions, the algorithmic Tesla price prediction from CoinCodex is currently forecasting TSLA to reach a peak of$275in Q 2025. This would represent a 56% increase from the current price.
If we take a look at forecasts made by Wall Street analysts, the 1-year forecast for TSLA is mostly neuralat the time of writing. Out of a sample of 34analysts, the average target for TSLA stock is $207, which would represent a +18% increase from the current price.
Meanwhile, among thesample ofanalysts tracked by TipRanks, 18analysts recommended investors hold TSLA stock. 10 analysts are recommending that investors should buy the stock, while 6 have given it a sell rating.
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What’s next for Tesla?
In January 2023, Tesla announced price cuts to its vehicles in the United States and Europe. The company’s high-profit margins give it significant room to maneuver and potentially pressure its competitors by cutting prices further. In the fourth quarter of 2022, Tesla saw $9,000 in net profit per vehicle sold, which was more than seven times higher than the comparable figure for Toyota Motor Corp.
In the face of a potential recession, the company said in an earnings release that it was working towards “accelerating our cost reduction roadmap and driving towards higher production rates.” Tesla outperformed its competitors in 2023 mainly through cost control and cost innovation.
By the end of 2023, Tesla initially aimedto produce 2.2million vehicles. According to the company's own report, it fell short of that target, managing to produce "only" 1.81 million vehicles. Still, that was an impressive 35% year-over-year increase compared to 2022.
Of course, Tesla has also faced challenges in the recent past. The company’s shares declined substantially in the last quarter of 2022, and the stock’s 1-year performance is uninspiring -11.2% at the time of writing. In 2022, Elon Musk announced that the company would reduce its salaried headcount by 10%, which translated to about 10,000 employees at the time. There have also been reports of another wave of layoffs at Teslain 2023.
Some of the factors that have contributed to the drop in Tesla’s valuation are increasing competition in the electric vehicle market, the uncertain macroeconomic outlook, and Elon Musk’s controversial acquisition of social media platform Twitter. Elon Musk’s $44 billion Twitter acquisition introduced concerns about whether Musk would be able to dedicate the same amount of focus to Tesla as he did before and also harmed Tesla’s brand image among some consumers.
Still, some of the concerns that led to the Tesla stock crash in 2022 appear to have been overblown. The stock has mounted an impressive recovery in 2023, as TSLA more than doubled in value. Whether that momentum can be extendedinto 2024 hinges on Tesla's ability to retain its dominating market share in the EV space, which is getting increasingly more difficult due to Western car manufacturers like Ford and Volkswagen and Chinese companies like BYD and Nio.
The bottom line: Tesla’s long-term prospects appear to be solid
With the increasing adoption of electric vehicles, Tesla is positioned well to continue growing in the future. While Tesla could certainly be negatively impacted if there is a recession in 2024, the company is likely to continue its success over the long term, and many investors believe Tesla will continue to dominate the EV market and find the TSLA stock a good buy at current prices.
If you’re interested in other stocks that could be good candidates for long-term holding, check out our list of the best dividend stocks.
