Quickly rising to become the most valuable automaker, Tesla's (TSLA +4.64%) journey has been nothing short of historic. Since making its public debut 14 years ago, Tesla's remarkable success has made it synonymous with the electric vehicle (EV) industry, paving the way for a more sustainable future.
While the company's ability to mass-produce EVs lies at the core of its success, there are several other technological frontiers Tesla is pioneering that will ensure it remains on its historic trajectory. Let's take a look at what the future holds for Tesla and where it could be in the next 10 years.
Image source: Getty Image.
EV growth continues
Thanks to its vertically integrated supply chain, strategic location of factories, and embrace of technology, Tesla has scaled its manufacturing process to become the top producer of EVs in the world. This unique business model has helped it go from producing just under 250,000 vehicles in 2018 to around 1.8 million in 2023.
While there are concerns that an increasing number of competitors are joining the EV race, they face an uphill battle to unseat Tesla. With the addition of a new factory in Mexico and possible future locations in Thailand and India, CEO Elon Musk seems to be set on accomplishing his ambitious goal of producing more than 20 million EVs in a year by 2030.
Image source: The Motley Fool.
Although this goal might be a bit overzealous, there is no doubt Tesla will increase its production capacity over the coming years and is still in a prime position to benefit from exponential growth of EV adoption. With estimates projecting that two-thirds of global auto sales will be EVs by 2030, I'd be willing to bet Tesla still reigns supreme over the market 10 years from now.
Creating the autonomous future
As it currently stands, Tesla generates the bulk of its profits from EVs. But should all go to plan, Musk believes the company's pursuit of autonomous driving will create a new lucrative business endeavor -- robotaxis.
Although Tesla still has some progress to make before completely eradicating the need for drivers, the company has made significant progress. Thanks to a major breakthrough with its full self-driving software, the launch of a robotaxi fleet is less of an if and more of a when.
NASDAQ: TSLA
Key Data Points
Musk thinks that when robotaxis become a reality, it will be a moment talked about 100 years from now and the catalyst that could send Tesla to a $10 trillion valuation. And he isn't alone in this thinking. Based on a report from Ark Invest, analysts estimate that robotaxis could make up more than half of total revenue and bring in around $450 billion to $600 billion, a dramatic increase from Tesla's $80 billion in revenue today.
Musk predicts full autonomy for vehicles will be achieved in 2024. This is probably a bit optimistic, but based on Tesla's track record of achievement, it seems like a safe bet that the company will solve the autonomy problem in the next 10 years and eventually launch its robotaxi fleet.
A real long-term growth opportunity
Tesla has become the most valuable automaker and the seventh most valuable company globally for many reasons. With the ability to generate positive cash flow in the notoriously capital-intensive auto industry, Tesla is reinvesting profits to push technological boundaries, widen its economic moat, and cement its spot at the top.
Although recent economic challenges like inflation and high interest rates have dampened growth prospects in the near term, these will prove to be minor speed bumps on Tesla's journey. Few other companies hold as much long-term upside as Tesla. Don't be surprised if it becomes the most valuable company in the world a decade from now.
