US: Tesla has a long road to achieve Apple-like valuation image

US electric carmaker Tesla Motors has – according to its ambitious billionaire entrepreneur and co-founder CEO Elon Musk – the chance to match Apple Inc’s current market value in just a decade.

But, actually, taking hard facts as evidence – how much time Tesla would need to achieve the goal? It turns out that rough calculations show the company would actually need around 26 years, not just a decade. That is, of course, unless its deliveries explode much in the way Apple’s iPhone did. Earlier this week, Musk caught the analysts off guard by bullishly forecasting that Tesla would be worth around $700 billion by 2025 – roughly the same size of Apple’s current valuation – the technology company is the No. 1 in Standard and Poor’s 500 index today. Besides the fact that Wednesday’s earnings call was not one to come up with stellar results – Tesla’s fourth quarter losses soared from the same period in 2013 – investors also pointed out that Tesla’s market value would need to jump 2,700 percent from the current $26.6 billion.

And, given that its current annual production rate has been forecasted at 55,000 units annually, it would need to sell every single car until 2040 to get to that market level. Naturally, Musk envisions an expanding production rate, but the question is by how much? Now, the market cap of every Tesla car represents $463,636 – and if the ratio remains unchanged than Tesla would need to sell each year 1.45 million units to have justification for a $700 billion figure.

Via Reuters