Can Tesla Stock Reach $1000 by 2030?

However, this year hasn't been an easy one. Investors seem to be intensifying their pessimistic views on companies led by Elon Musk, and stock pricesDown 28% in 2024Doing it (3/27). Expecting that Tesla will continue to be a winner in the long run, now may be an opportunity to buy stocks that have plummeted. But can stocks rise 456% between now and 2030 to reach $1000 per share?

Tesla stock over the next 6 years or soAnnual average of about 33%I think one main thing needs to happen in order to rise at a pace of and reach $1,000. It's a re-acceleration of overall business growth.

Things have slowed down dramatically last year. Tesla's sales in 2023 increased by only 19%, and the fourth quarter was disappointing with a 3% increase. This is the new normal for Tesla, which has increased annual sales by 50% or more many times until now. Rising interest rates are a major headwind when consumers try to buy new cars.

But the good news is that the EV industry is still in its infancy. In 2022, 14% of passenger cars sold worldwide will be EVs. There is still a big path for EVs to penetrate the market and take market share from conventional gas engine cars.

Tesla accounts for about 55% of the industry in terms of sales volume in the US, and is in a great position to benefit from that. Unit sales and sales begin to recover, and if growth is recorded even slightly close to the level of a few years ago, stock prices will begin on the path of rewarding shareholders. Margins will begin to expand again as Tesla benefits from manufacturing efficiency.

In such a bullish scenario, it seems certain that they will hit the $1,000 mark.

However, there are reasons investors should keep their expectations down a bit. Despite the company's current market capitalization of 560 billion dollars, not only is it bold to think that stock prices will rise at an annual rate of 35% over the next 6 years, but several factors are increasing the bearish factor.

What if the US economy (and other major economies) stay in a high interest rate environment (above the level of the 2010s) longer than expected? As consumers' monthly payments increase, not just Tesla, but allPressure on automakers' salesThere is a possibility.

Fierce competition is unfolding in the EV field. The fact that Tesla spearheaded the EV movement and encouraged other companies to follow suit is worthy of praise. However, today's consumers have many options. The reason Tesla had to lower model prices many times throughout 2023 is also due to competition.

It would be reasonable to think that corporate growth will begin to taper off. No matter how revolutionary technology they have, no matter how disruptive products they have, and no matter how farsighted leaders are, no company can grow to the sky. Tesla is already reaping the fruits of low-altitude flight. As a result, Tesla's future profits will be far more moderate compared to the past.

Even though stock prices have dropped, I think they are still overvalued. Trading with a price-earnings ratio (PER) of 41.7 means a rosy prediction, but based on what has just been explained, that may not be realized.

It is unlikely that Tesla's return will be close to the past 5 years. In other words, investors shouldn't expect the share price to be $1,000 per share by 10 years from now.