Tesla Net Worth: Is the Electric Car Giant Still a Good Bet To Invest?
Written by
Cynthia Measom
Edited by
Ashleigh Ray
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Tesla, with a net worth of $732 billion, is a leader in more than just electric vehicles. From advancements in autonomous driving to energy solutions like solar power and battery storage, Tesla’s impact spans multiple industries.
However, despite its innovations, Tesla’s stock has underperformed this year. Nick Scibilia, co-founder and CEO of Orbit, said if you take a look at the S&P 500 as of early September, it’s been trading near all-time highs — almost 16% so far this year. However, he pointed out that Tesla has seen a decline of nearly 13% YTD, which is underperforming compared to the broader market.
If you’re thinking about investing in Tesla, understanding factors like its valuation, growth potential and the risks involved will help you determine if it fits your financial goals.
What Investors Should Consider Regarding Tesla
“Even though Tesla is part of the ‘Magnificent 7’ stocks that drive the market, it’s clear Tesla is the weakest performer in this group,” Scibilia explained. “With the upcoming election and uncertainty in the air, we’re seeing money shift away from tech and financial sectors toward retail, which could make things trickier for Tesla.
“If you’re thinking about adding Tesla to your portfolio, I’d recommend checking out their Q2 earnings call and listening to [what] Elon Musk had to say about where the company is headed next.”
How Tesla’s Valuation Compares to Its Future Growth Potential
Scibilia said Tesla has been labeled “overvalued” for years, but he saw it differently.
“This is more than an electric car company,” he said. “It is a leader in tech innovation. Past EVs, Tesla’s value lies in its advancements in autonomous driving, its massive charging network and renewable energy solutions like solar-powered roofs and battery storage.”
Scibilia noted that Tesla’s growth potential is still huge if you consider the full scope of its technology-driven ecosystem.
“I believe Tesla’s room for growth goes as far as its mind and hunger for technology innovation,” he said. “That alone is enough for me to believe it has plenty of room for growth, as they are always looking to innovate and lead the charge in the alternative energy industry.”
The Role Market Volatility Plays in Investing In Tesla
Cliff Ambrose, FRC(SM), CAS(r), founder and financial advisor at Apex Wealth, said market volatility plays a significant role when it comes to investing in Tesla.
“The stock has been incredibly volatile, and investors need to be prepared for the ups and downs,” he explained. “This is especially important to manage from a risk perspective, and one way to do that is to make sure Tesla isn’t taking up too large a portion of your portfolio.
“It’s a high-growth, high-risk stock, and while the potential returns are exciting, it’s critical to balance that risk with more stable investments. Our typical holding percentage for an individual stock like this in a portfolio ranges from 2% to 5%. You never want too many eggs in one basket.”
How Tesla’s Fundamentals Affect Long-Term Investment Potential
“Elon Musk is all about finding new ways to bring in revenue through the products Tesla already has, which is a smart move to keep the company growing in the long run,” said Scibilia. “For example, in the Q2 earnings call, he pointed out that Tesla has enough equity to support its product roadmap, aligning with the company’s expansion goals.”
Scibilia explained that the company’s Q2 report also showed a 2% revenue increase compared to last year, thanks to things such as energy generation, Cybertruck deliveries and new services.
“However, there has been a slight decline in certain model deliveries and a reduction in product costs,” he added. “Overall, I think Tesla’s ability to innovate — while keeping an eye on costs — makes it a solid choice for long-term investment.”
Ambrose said Tesla’s fundamentals are something to watch closely.
“The company is profitable, which is a positive, but it faces growing competition from both traditional automakers and newer entrants in the EV space,” he explained. “At the same time, Tesla continues to innovate, and its brand remains incredibly strong. For those who believe in the company’s long-term vision, Tesla could be a compelling investment, but the high valuation and competition are factors that can’t be ignored.”
What Type of Investor Is Tesla Appropriate For?
Ambrose said that investing in Tesla is more appropriate for those who are comfortable with high volatility and looking for growth.
“Younger investors, or those with a long time horizon, may find Tesla to be an attractive piece of their portfolio, because they can ride out the potential market fluctuations,” he explained. “On the other hand, more conservative investors or those nearing retirement may want to approach Tesla with caution due to the inherent risk involved.”
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