A chronological look at Tesla’s changing value proposition

Outsiders have long debated the value of Tesla, whose price-to-earnings ratio is one of the most expensive in the S&P 500 and much higher than a mere car company. But CEO Elon Musk has his own ideas about the “value” of Tesla, and they’ve morphed over the years.

Since about 2016, the company’s mission has been “accelerating the world’s transition to sustainable energy,” after pivoting from its initial mission “to accelerate the world’s transition to sustainable transport.”

We dug through company transcripts looking for Musk’s comments on the value of Tesla. Early on, he said the company’s value was its talent, then it was its cars, and then AI and robots.

On the call about Tesla’s latest earnings, where its profits and sales missed expectations by a long shot, Musk spoke about an idyllic world with “sustainable abundance” brought on by his company’s autonomous robots (which don’t exist yet). He was short on details, but the oxymoronic idea is explained well here by Deloitte.

So how do we reach this supposed sustainable abundance, where you can have your cake and eat it too with the economy and the environment? Tesla robots, duh.

“The future of the company is fundamentally based on large-scale autonomous cars and large scale and large volume, vast numbers of autonomous humanoid robots,” Musk said. “The value of the company is delivering sustainable abundance with our affordable AI-powered robots... If you say, ‘What’s the happiest future you can imagine?’ That would be a future where there’s sustainable abundance for all. Closest thing to heaven we can get on earth, basically.”

(In case you’re wondering, stock market investors currently think Tesla, the company that can theoretically provide the “closest thing to heaven we can get on earth,” is worth about $820 billion.)

Here are other examples of Musk outlining what he thinks is the value of Tesla, in reverse chronological order:

Q4 2024 earnings, January 2025: “My prediction long-term is that Optimus will be overwhelmingly the value of the company.” Market cap at the time: about $730 billion.

Q2 2024 earnings, July 2024: “I think the long-term value of Optimus will exceed that of everything else at Tesla combined... The value of Tesla overwhelmingly is autonomy.” Market cap at the time: about $785 billion.

Q1 2024 earnings, April 2024: “We should be thought of as an AI robotics company. If you value Tesla just like an auto company, fundamentally, it’s just the wrong framework. If you ask the wrong question, then the right answer is impossible. So, I mean, if somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company. But we will and we are.” Market cap at the time: about $460 billion.

Q4 2023 earnings, January 2024: “Optimus obviously is a very new product, an extremely revolutionary product, and something that I think has the potential to far exceed the value of everything else at Tesla combined.” Market cap at the time: about $660 billion.

Investor Day, March 2023: “As autonomy is effectively turned on for the fleet, probably it will be the biggest asset value increase in history overnight.” Market cap at the time: about $600 billion.

2021 shareholder meeting, October 2021: “The fundamental good of Tesla, I think, is — by how many years did we accelerate sustainable energy? This is the fundamental, I think, way to think of the value of Tesla. And so, if we are able to accelerate sustainable energy by more years, that is good, hence the need to grow quickly.” Market cap at the time: about $780 billion.

Q2 2021 earnings, July 2021: “Things are obviously headed toward a fully autonomous electric vehicle in the future. And I think Tesla is well positioned and, frankly, is the leader objectively in both of those arenas: electrification and autonomy. So it’s always tempting to try to find analogies with other companies or whatever, but really the value of a fully electric autonomous fleet is insanely gigantic. It boggles the mind, really. So that will be one of the most valuable things that is ever done in the history of civilization.” Market cap at the time: about $630 billion.

Q4 2020 earnings, January 2021: “The value of Tesla is just what’s the cell output that implies vehicle output, and then at least double that for autonomy revenues — probably more than double — and that’s how you figure out the value of the company, I think, long-term.” Market cap at the time: about $750 billion.

Q3 2019 earnings, October 2019: “At the point which we’re able to upload the software, enabling a Tesla to become a robotaxi, expect to have that from a functionality standpoint by the end of next year... That transition, that sort of flipping of the switch... from not-robotaxi to robotaxi, I think will probably be the biggest step-change increase in asset value in history by far.” Market cap at the time: about $60 billion.

Q3 2018 earnings, October 2018: “But our goal really is to make electric cars that everyone can afford, not to sort of mine high-option-value cars. It’s like if we could produce the $35,000 car today, we would do it. We need more work. There’s more work to do before we can make a $35,000 car and have it be part of the gross margin. We’re probably less than six months from that, but that’s our mission.” Market cap at the time: about $53 billion.

SolarCity acquisition call, June 2016: “In the long run, the value of the company is defined by the value of its products and services.” Market cap at the time: about $30 billion.

Q2 2010, August 2010: “Ultimately, the value of a company is a function of the level of talent contained within it, and how well that team is working together.” Market cap at the time: about $2 billion.