Tesla’s price-to-earnings (P/E) ratio is currently c. 283, much higher than other large technology companies: Nvidia (69), Amazon (61.5), Microsoft (37.5), Meta (33.7), Apple (28), Alphabet (23.8).
Tesla is not just considered a company that produces electric vehicles (EV) and batteries. In 2024, despite selling 10% of Toyota’s vehicles, it had a market capitalization of 1.4 billion dollars ($Bi), greater than the combined market capitalization of all other car manufacturers.
Tesla’s share price incorporates a high premium resulting from CEO Elon Musk’s promises of future technological advances in autonomous driving and humanoid robots.
The radical winds sown by Musk caused symmetrical storms in Tesla’s sales, which had grown 38% in 2023 and fell in 2024 (-1.1%) and 2025 (-8.6%; -33% in Europe). Strong competition from Chinese EVs and the expiration of US EV purchase tax credits led to the recent decision to suspend production of the X and S models.
Despite Musk’s visionary narrative about millions of humanoid robots and the imminence of autonomous driving vehicles, the fact is that self-imposed deadlines continue to be exceeded. CyberCab / RoboTaxi has been promised “next year” since 2016. Meanwhile, Waymo (Google) rapidly increases operations in the US; Zoox (Amazon) and Cruise (GM) are more advanced than Tesla. The same happens in the Chinese market, dominated by Apollo Go (Baidu), followed by Pony.ai, WeRide and AutoX (AliBaba). In Europe, WeRide stands out, with Wayve, Waymo, Mobileye (Intel) carrying out tests. Musk announced days ago that Tesla will focus on the development of Tesla Optimus humanoid robots and artificial intelligence (AI), with an investment of 2 billion dollars in xAI, Musk’s AI company.
Musk has committed to putting it up for sale (with a price
The growing fissures in this narrative of promising tomorrows that sing call into question Musk’s credibility as a technology and business savant. And they may lead many investors to wonder whether the risk of investing in Tesla is becoming too high.
*Financial consultant and business developer www.linkedin.com/in/jorgecostaoliveira
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