Last Update07 May 25Fair value Decreased 79%
Ignoring politics and the media circus around this company, I look at what I think is it's closest competitor: Hyundai.
Deliveries in 2024/2025:
Hyundai delivered 7.23 million vehicles
Tesla delivered 1,789,226 vehicles
But Tesla markets itself as more than a car company; saying that its future is in robotics, AI and robotaxis. So it's worthwhile looking at the possible developments from both of these companies in these fields:
Hyundai owns Boston Dynamics, the recognized world leaders in robotics. They have publicly shown a wide variety of robots operating autonomously in complex environments. They have also brought their Spot quadruped to market. Tesla has touted its Optimus robot, but the demonstrations have drawn criticism for potentially being remote-controlled by human operators. There is a lack of transparency here, but clearly they don't have the experience or technology of Boston Dynamics.
Hyundai have recently announced a multi-year partnership with Waymo to deliver robotaxis based on its IONIQ 5, allowing them to build on the AI developments of Google. Tesla has been promising self driving and robotaxi roll-outs for 10 years without much in the way of demonstrable progress.
With this in mind, let's use the PE ratio of Hyundai to establish a fair price for Tesla. Hyundai's PE ratio is around 3, so if we're generous and apply this to Tesla, using their current EPS of $1.82:
Share Price = PE Ratio × EPS = 3 × 1.82 = 5.46
Therefore if Tesla had a PE ratio similar to that of Hyundai, its share price would be $5.46
Either that, or Hyundai is significantly under-valued.
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Disclaimer
The user Areeighty holds no position in NasdaqGS:TSLA. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
