Tesla, Inc. Stock Hits New High — Time for a Reality Check

While Tesla investors bask in their recent big gains, they should keep in mind how dependent the stock price is on bullish expectations for future milestones.

Shares of electric-car company Tesla (NASDAQ:TSLA) hit a new high of just under $390 during trading Monday, though the stock is closer to $382 at the time of this writing. Those gains add to the stock’s bullish run since the company started delivering its Model 3 this summer, and they bring its year-to-date returns to 89%.

While Tesla stock’s latest rise was fueled in part by speculation about the company’s upcoming products, the longer-term fate of the stock will likely depend primarily on how well the automaker can ramp up the production and delivery of its vehicles.

Investors look to upcoming product launches

Tesla grabbed headlines last week as it announced a rollout of new Superchargers designed for city centers. In addition, the family of a man killed in a crash in a Tesla vehicle last year that happened while Autopilot was activated said the technology wasn’t at fault.

But more speculative news could also be driving bullishness toward the stock in recent days. Tesla CEO Elon Musk recently confirmed the company will unveil its new electric semitruck on Oct. 26. Further, Musk may have teased the company’s plans for its pickup truck last Wednesday when the CEO and co-founder responded to a question about whether a pickup truck is coming after the Tesla Semi. Musk tweeted back saying, “What if we just made a mini version of the Tesla Semi?”

A teaser photo of Tesla's semitruck.


During Tesla’s annual shareholder meeting this summer, Musk hinted that the company may unveil something alongside the Tesla Semi. “I would just really recommend showing up for the semi-truck unveiling,” Musk said. “Maybe there’s a little more than we’re saying here.”

Could Tesla be planning to give investors a sneak peek into an early prototype of its pickup truck in October?

A reality check

No matter how game-changing the Tesla Semi might sound, or how intriguing the possibility of an early look at a Tesla pickup truck might seem, investors should keep in mind that the electric-car maker is already priced for astounding growth. After the stock’s massive run recently, Tesla has a market capitalization of about $64 billion — well ahead of General Motors and Ford at $56 billion and $46 billion, respectively. Yet GM’s and Ford’s revenue handily trumps Tesla’s. In the trailing 12 months, GM and Ford brought in sales of about $170 billion and $154 billion. During this same period, Tesla’s revenue was just $10 billion.

Sure, Tesla has already laid much of the groundwork for its planned Model 3 production ramp-up, building its Gigafactory and spending billions more in capital expenditures recently. Further, the demand for Tesla’s production to soar from an annual run-rate of 100,000 vehicles to closer to 500,000 by next year is basically already in the bag. Tesla has hundreds of thousands of reservations for its recently launched Model 3 — and these reservations are steadily climbing.

But Tesla’s $64 billion market capitalization prices in more than a fivefold increase in vehicle sales in the coming years. It prices in meaningful growth for years to come after this increase. It assumes Tesla can execute on unprecedented production ramp targets. It also assumes that an onslaught of new electric vehicles from other automakers will boost the overall market for electric vehicles at a faster rate than competition eats at Tesla’s market opportunity.

Tesla vehicle production at Tesla's factory in Fremont, California.


Tesla investors are likely happy to see shares trading higher. But shareholders should keep in mind that Monday’s stock price is based almost entirely on a rosy outlook for the electric-car maker’s future.

I’m not selling shares. But I’m not buying either.

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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.