Why I think Tesla stock will be more than $1,000 in 2020

Why I think Tesla stock will be more than $1,000 in 2020

If you have researched this subject you have found articles written by analysts who believe Tesla will appreciate nicely in the next few years. But I took a step back and wondered about the bigger picture. Tesla wants to have a full lineup of cars such as trucks, smaller cars, roadsters, etc. So I did a projection out to 2020 and estimated fairly conservative sales numbers for each model. I estimated various costs based off of their latest 10k filing. Then I calculated expected earnings and divided by the # of outstanding shares to arrive at an eps. I applied a p/e of 40 as this is a growth stock and I expect it still will be in 2020. The final result was a stock price right under $1,000. Below is my math. Keep in mind that the Model S is the number 1 selling Luxury sedan in the U.S. and this has happened with no advertising or marketing. In 8 years there will be a LOT more awareness and confidence in Tesla.

Introduction Model Class Annual sales Avg Price Margin Profit

2012 Model S Luxury Sedan 30,000 $80,000 25% $600,000,000
2014 Model X Crossover SUV 20,000 $85,000 25% $425,000,000
2016 Model M Mid-size Sedan 100,000 $40,000 20% $800,000,000
2018 Model T Pick-up Truck 100,000 $40,000 20% $800,000,000
2020 Model R Roadster 50,000 $50,000 25% $625,000,000
2020 Model E Economy 200,000 $25,000 20% $1,000,000,000

Total profit - $4.25B. R&D costs of $400m. S,G&A costs of $350m. 26% tax rate makes net earnings of $2.59B.
Divided into 114.5m shares gives EPS of $22.62 and P/E of 40 gives us a $905 stock price.

Tesla earned $50,000,000 last year selling ZEV credits. I have not forecasted any revenue for that because I do not have any info to help me understand how much they make off of each car nor do I know if they will still be able to sell those in 2020.

Also, I have not estimated revenue for selling their batteries and motors to other manufacturers. They are on a path to delivering LOTS of these to fleet delivery vans and possibly taxi cabs in the future but I cannot forecast that. Also licensing their patented batteries to other manufacturers could be huge. This piece of business alone could be a huge multiplier on their earnings. So that puts us over $1,000.

Now, call me crazy but I think Tesla will sell more than what I have forecasted. If they already out-sell BMW and MB w/ their 1st car what if we assume they could at least match those guys w/ their Gen III car? BMW sells 350,000 3 series worldwide each year. And what if they can match Prius sales with an economical model? Another 360,000 sales per year. So I had some fun and re-ran the model with the following sales numbers in 2020: S - 100,000, X - 100,000, M - 400,000, T - 200,000, R - 100,000, E - 400,000. I lowered the P/E to 30 to account for all of the growth they have already achieved in this scenario. Stock price - $2,205!!! With no revenue from selling drivetrains to other makers.

I actually think they will outsell BMW and MB in the future so I'm hoping for even more earnings. Afterall, they are outselling them already just out of the gate.

Now this only works under a few assumptions:

1) That Tesla will continue to improve range/price on batteries every 5 years or so as Elon has hinted at.
2) That there isn't a major setback in battery safety forcing a recall/redesign which would yield bad publicity and hurt sales.
3) That the other carmakers will not be able to emulate the same battery performance w/o licensing it from Tesla.

So go buy the stock and thank me later :))))

katsu555 | August 21, 2013

How do you look at the potential competition coming from fuel cell vehicles ?

Toyota says it will start selling FCV-R in 2015. The range is 500 miles.

A weakness of FC may be the high deployment cost of stations, which require public funding.

Taking advantage of the so-called first mover advantage with its faster deployment of Tesla charger network may be one of the key factors for Tesla to differenciate vis-a-vis FC competition and
to realize 1,000 USD/share.

Tesla CAN do it alone without additional public funding. That is the strength of Tesla initiative.

Favguy | August 21, 2013

I don't see fuel cells as anything but a red herring at this point, in fact they've been this for the last 15 years or so.

They make no sense from an energy usage or infrastructure point of view compared to the simplicity of battery powered EV's.

I personally feel they are a stall tactic by big auto.

Brian H | August 21, 2013

Elon: "Fool cells".

wcalvin | August 21, 2013

Remember that network of fault lines that goes up the east bay. An earthquake could shut them down for six months, so it would be nice if Tesla had a second factory elsewhere.

Tesluthian | August 21, 2013

Let's not forget to model in for the supercharging network's worldwide buildout in 5-10 years and it's revenue potential, which could be in the hundreds of millions of dollars.

Elon has said he's not against letting other car companies use the superchargers out in the future, and I see a potential 3 tier payment system.

1) Tesla owners, superchargers are free for life.

2) Investment Partners and their cars that use Tesla made batteries and drive trains. These partners get to use superchargers at a reduced price.

3) Non investment partners that use Tesla made batteries and drive trains pay the highest price; but always pegged to be at least 20% less than the equivalent price of gas.

It's important to remember that no other company knows how to supercharge batteries, or what battery chemistry to use. Nor could they manage the charging system software etc. that's a moat wider and deeper than the Grand Canyon. In short, the supercharger system has no competition !

So to get into the supercharger system, and stop themselves from becoming obsolete, other EV car companies will have to buy Tesla batteries , drive trains and supercharging management systems, wireless billing systems , etc., thus increasing those sales. (Tesla would have to work on making their hardware as non reverse engineering and steal-able as possible).

In addition to these hardware fees, supercharging usage fees could end up in the hundreds of millions of dollars. Thus supercharging fees would fund even more worldwide buildout of the supercharging system, all paid for by Tesla's competitors in a virtuous continuous feedback loop for Tesla. As the supercharger network gets bigger and bigger more and more companies will want to get onto the supercharger system, and pay for the system with usage fees. And consumers will benefit from a faster and much more density in the supercharger network.

This is just one of many non-traditional hidden profit streams Tesla has that is not being priced into any of the potential earnings models. And it's just one reason why I also think $1,000/share by 2020 is well within reach.

JZ13 | August 21, 2013

@Tesluthian - I agree with you 100%. I also believe that the other auto manufacturers could very well end up paying Tesla huge revenue streams for their supercharger network access.

Here's another thought that could dramatically increase Tesla share price: Autopilot cars. Autopilot technology is definitely going to come from Silicon Valley. It's a race between Google and Tesla. Given that Elon thinks that Google's lidar system is too expensive, Tesla's camera plus software option may win out. If Tesla is first to market with an affordable auto pilot software program look out! Imagine how many cars will be sold to commuters who want to work or surf the Internet while their car drives them to the office. And then imagine the licensing revenue they would receive for lending this technology to every other automaker. That alone could be another $1,000 added to the stock price.

Tesluthian | August 22, 2013



SamO | August 22, 2013


Tesla is nowhere near a driverless car solution. They are back of the pack.

Google already has 500,000 miles (as of a few months ago) of intervention-free testing.

Their one thing going for them is that Elon has embraced autopilot far more directly that any other automobile CEO.

I think a partnership/product integration works well since the GPS is already powered (in-part) by Google.

With all that being said, Tesla has the clearest path of any manufacturer. The Google Lidar system is going to get smaller. TM is not going to strap a bunch of ugly sensors to the roof to destroy the low drag coefficient.

Tesluthian | August 22, 2013

Just a thought , not even 2 cents worth. I wonder if there would be a use for auto-drone mode ? Sit at home at the computer and drive the the car around for various purposes. Any uses, I wonder, for that ? EG anti-theft, your car gets stolen, you fire up the computer and drive it right back home. Others?

Be the same concept as airplane drones, only for commercial and consumer purposes, not military ones.

Tesluthian | August 22, 2013

Maybe a better name for it would be Drone Pilot mode rather than Auto Drone, since a person is guiding the car remotely.

Tesluthian | August 22, 2013


The short answer is no, not competitive EV's. In 5 to 7 years time, millions of people yearly will see tens of thousands of Tesla cars being super charged for free at hundreds to thousands of superchargers worldwide.

And I don't think it's a stretch for people to say to themselves, "I've never seen anything like that, maybe I should get some stock in that company !"

Stock up $9.00 today.

AlMc | August 22, 2013

nick: Let him/her dream. If you read the threads on TMC about a year ago TSLA investors were bemoaning $20/share and thinking of getting out. Production deadlines coming and going without seeing cars that many had deposits on for over two years.

In less than 12 months. Cars coming off the assembly lines in never dreamed of numbers. The car gets cudos from major motor magazines, 99/100 Best Car Ever tested from CR and now best safety test scores ever recorded.

Government loan repaid and TSLA close to $160....

If one predicted $1,000/share a year ago I would have signed the commitment papers. Today, $1,000 is a dream, but not an impossible dream.

JZ13 | August 22, 2013

@NIck - I thought you cowered away months ago. Apparently you have been lurking. You have been wrong about Tesla by a mile. I doubt anyone in these forums gives you any credibilify at all.

jonlivesay | August 22, 2013

If it hits a thousand a share, I buy all early adopters dinner. Maybe first twenty thousand owners counting roadsters. Will need to sell some stock but still would be great party!

bradslee | August 23, 2013


If your offer is valid in next 10 years, I will take it. I would say that the odd that you will buy all of us (first 20K MS+Roadser owners) a nice dinner is quite good. Looking at GOOG, on August 30, 2004, its stock price was $100 and on July 8, 2013, it reached $923.

J.T. | August 23, 2013

@jonlivesay If the stock hits 1000 a share send my dinner to my villa by Lake Como. It's the one right next to George Clooney's.

katsu555 | August 23, 2013

I want Tesla to get its maximum achievable business performance in the coming several years as a shareholder. That will hopefully get us to $1,000/share if it is feasible at all.

Reading this enthusiasts' happy postings, I am forced to think that Tesla's current success with its Model S is predominantly an American phenomenon.

In any other country it will be difficult to find this high level of REAL happiness and excitement among automobile buyers. This comes from the fact that America is inherently the automobile country. In Japan where I live this kind of enthusiasm will not be generated.(But, Tesla will be the first successful American car company in Japan,when it comes with 80% sized Model S to Japan in the near future. It may be named as Gen III)

There is now a hypothetical strategic dilemma facing Tesla top management. US or global. What should be the optimal resource/energy allocation in the coming 2 years ? This could be a hypothetical Harvard Business School case study.

Reading 1) enthusiasts forum postings, 2) New York times artile, and 3) global stories including China, Europe, etc. I tend to think that Tesla should focus its 95% of corporate energy on USA. Particularly it should focus more on faster deployment of Supercharger network in USA (and Canada.)

It will create more happy customers and more solid sales than otherwise. It will give the competitive edge and solid market position to Tesla in addition to its remarkable quality of Model S.

Global markets can be taken care of well after the great US market is conquered. There are 50 states (i.e., 'countries') in the US. That is a big, big number and big REAL car market compared with tiny global sales here and there that can be obtained in the coming 2 years.)

Focus, focus, and focus on USA (incl.Canada).

JZ13 | August 23, 2013

@katsu - Thanks for chiming in. Elon and company disagree with you as they just opened the European assembly plant this week and will be doing so in Asia later this year. They are entrenched in the global rollout so too late to stop now. As far as world-wide demand, they believe it will be even greater in Europe and for good reasons: 1) Gas prices are twice as expensive as they are in the U.S.; 2) smaller countries so less range anxiety; 3) Europe tends to be more eco-friendly than U.S.

SamO | August 23, 2013

Hitler's Short Position in $TSLA is Ruined

Brian H | August 23, 2013

You haven't seen what will happen to the Japanese when they actually get to drive the car. Auto-satori!

Alaa | August 24, 2013


I would like to ask you as to what will the effect of the FED and nearly all central banks in the world printing money, will have on the price of TSLA or any other stock for that matter?

I think that the cost of a Big Mac will go up. The market will keep going up and it will take some time before the Bic Mac catches up with the stock market. So we could see $1000 much sooner than predicted.

The value of the $1000 then will not be the same as it is today though, but as I said there will be a lag time between the stock market and the price of food, health insurence, educateion etc.

JZ13 | August 24, 2013

@alaa - My Discounted. Cash Flow Analysis is in today's dollars. Higher inflation rates typically lead to lower P/E ratios. Lower multiples obviously have a negative impact on the price of the stock.

JZ13 | February 26, 2014

25% of the way there and it's only the beginning of 2014.

BTW, if you read my OP you'll see that the $1,000 prediction was a very conservative one. I go on to make the argument for a stock price over $2,000 by 2020.

NomoDinos | February 26, 2014

Crazytown. I'm not betting against you, J.

SamO | February 26, 2014


$2000 may be conservative when you take into account Tesla getting into the energy storage business. The market for cars is only $3 Trillion. Energy markets are worth 10X that, easy.

JZ13 | February 26, 2014

+1 Samo - I had no idea this was a biz opportunity for Tesla when I first posted this back in April.

I gotta say that I am disappointed that the Gigafactory will only produce enough batteries for 500,000 cars by 2020. I've seen JB Straubel's Stanford presentation and he had a slide that showed they would deliver 700,000 cars in 2019 which you could extrapolate to 1,000,000 in 2020. I've got to adjust my DCF analysis for fewer sales by 2020.

Brian H | February 26, 2014

They will still have non-Gigafactory supplies and suppliers available. Its output will supplement existing mfrs', not eliminate it.

carlk | February 26, 2014

@Alaa You need to learn a few thing about the economy instead of repeating the talking point Fed is printing money and it's ruining the economy. Why don't you Google "money supply and economy" and try to understand how it works? It's much more complicated than that simple talking point says.

Money supply is not the only factor that dictates inflation. Not to mention very low inflation or deflation is more problematic than moderate inflation. BTW inflation is around close to perfect 2~3% in recent years and there is no sign (yet) that it will go up any time soon. Fed will sure to take actions if inflation does go up but things seem to be going relatively smooth at this moment and the stock market does reflect that fact.

carlk | February 26, 2014

@Brian H I think you're right. Gigafactory was mentioned to supply the GenIII cars only. Model S and Model X likely will continue to use batteries from current suppliers.

SamO | February 26, 2014


Don't rejigger yet. They talk about assembling 50GW of packs per year.

With GENIII, you can make 400K @50kW, 100K MS @100kW, 100k MX @100kW

600K cars, minimum.

JZ13 | February 27, 2014

You guys raise a good point regarding the additional supply, makes sense.

SamO | February 27, 2014

Plus, have you noticed that Tesla likes to sandbag?

2050project | February 28, 2014

Article on this exact topic here, pretty compelling:

carlk | February 28, 2014

@SS I wouldn't call it sandbag but it's to create a good expectation and greatly exceed it. The tactic is what has been used brilliantly by Job's Apple too. Part of this is probably planned but the other part I suspect is even them are surprised of how much they could achieve.

SamO | February 28, 2014


I agree with the first part. He sets high expectations, but expects (personally) that he can do much better.

Btermanini | February 28, 2014

China is the wild card. I believe another Tesla car factory and probably a Gigafactory 2 in China are inevitable. The Chinese/Asian market is huge, and the lucrative EV incentives are available only for cars manufactured locally. Let alone the labor and transportation cost savings.
Even before starting deliveries in China, Tesla predicts sales will account for third of global sales. If you take the full potential of the Chinese/Asian market into consideration, Tesla annual sales should reach 1 million vehicles by 2022 with the help of a Tesla China factories to be announced in 2-3 years.
Under such circumstances, TSLA price of $1,000 by 2020 is conservative because of forward looking growth in sales and profits.

hitesh2269 | October 23, 2015

Can anyone guide me where to start to buy tesla stock.So after the money I put in stock today will pay for my tesla future car in next couple year.

tes-s | October 23, 2015

Just buy 100 shares of stock now for $210 a share ($21,000) and sell in in 2020 at $1000 a share and you will have your $100,000 to buy a MS.

tes-s | October 23, 2015

...but you may have to wait until 2022 since it seems Tesla is about 2 years behind the timeline presented in the analysis.

tommyalexandersb | June 18, 2016

Bumping to the top

tommyalexandersb | June 18, 2016

I bought 45 shares a few days ago. Hoping it goes up around the time of the model 3 unveil part 2. Feeling pretty confident.

tes-s | June 19, 2016

$1000 in 2020? Well on its way, and 4 years to go!

rdr1rx | June 19, 2016

The hype generated by a new up-and-coming company has already passed. Model 3 (M3 is a BMW) is coming and so are Powerwalls. Everyone knows this by now. New innovation is already here. TSLA is entering the competition phase as more established manufacturers hop on the electric train. TSLA is still a speculative stock, not a true growth stock (where are the consistent quarterly profits?) for me to pull the trigger at > $200/share with such a huge PE. But if the stock did a 4:1 split? Maybe. 7:1 like AAPL? I'm in.

EdwardG.NO2CO2 | June 19, 2016

@rdr1rx, the Model 3 will be the new M3 all over the world! /;-). BMW will have to find a new name.

carlk | June 19, 2016

I made a comment in another thread which maybe relevent here.

Elon has a big plan althougn many do not see it. Tesla is on way to become the foremost manufaturing company that will surppass Toyota, Mercedes or Apple (contractors) in that regard one day. Auto companies got a rude awakening a few years ago when Tesla designed and made a car that was better than anything they could make. They still think the got decades of experiences that they could easily beat Tesla back soon as they jump into the EV game. They will have another rude awakening in a few years when they discover Tesla leads them in manufacturing prowess too. Mark my words Tesla will kill them all,

rdr1rx | June 19, 2016

@EdwardG.NO2CO2: I agree, Model 3 sales (eventually) will surpass the M3 since M3s aren't truly mainstream. For the Model 3 to be the "new M3", it'll need a dedicated track package (stiff suspension, 30 series rubber, brakes, and mega battery) to endure enless laps 'round a track.

@carlk: I see that, too provided Tesla balances productivity with reliability. For the stock to grow (like SBUX, DiS, or V for example) steadily and consistently, Tesla has to turn profits and bring that PE wayyyy down. TSLA is below where it was when Model 3 was introduced. Hype pushes the stock, then it fizzles.