Tesla Stock Overvalued By Every Metric: Seeking Alpha

Tesla, Inc. CEO Elon Musk has confidently claimed that the company will reach 20 million annual vehicle sales by 2030.

Tesla's Q3 deliveries, which will be reported next week, appear set to fall short of market expectations. I Photo: Tesla X

Analysts warn of difficulties in achieving this growth, with downside risks to earnings expectations and overestimation of Tesla's growth potential, John Engle wrote for Seeking Alpha.

Tesla's current valuation is significantly higher than what can be justified by its automotive business alone. Its value of $758 billion is actually down to $455 billion, while its non-automotive enterprises face challenges.

Tesla has grown at a rapid pace over the past several years, with deliveries rising at a blistering pace year after year.

The company delivered just over 100,000 vehicles in 2017; in 2022, it delivered 1.3 million.

Last year, CEO Elon Musk confidently claimed that Tesla would reach 20 million in annual vehicle sales by 2030.

Of course, promising 20 million deliveries in 2030 is much easier than actually achieving 20 million deliveries. To do so, Tesla would have to grow about 40% annually from 2024 through 2030.

Q3 deliveries, which will be reported next week, appear set to fall short of market expectations, though Tesla is unlikely to cut its full-year delivery target of 1.8 million deliveries.

Looking beyond 2023, some analysts see further difficulties in the offing.

Deutsche Bank warned that the market's forward-looking consensus may be significantly overoptimistic: "Looking at 2024, however, we see considerable downside risk to earnings expectations due to [a] much lower volume outlook than the market believes. On the bright side, with the company not trying to push as much volume, there could potentially be less pricing pressure next year.

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