When looking at some of the best performing stocks of the past decade, there's no question that Tesla (TSLA -1.93%) is among the top companies on that list. Thanks to rapidly rising sales, its shares have skyrocketed 1,200% in the past decade.

But macro headwinds have crushed this electric vehicle (EV) company's fundamentals. Revenue growth turned negative in the latest quarter, with profits under serious pressure. Shares currently sit 57% below their all-time high (as of May 8).

Where will this top EV stock be a decade from now?

Betting on things to stay the same

Investors are certainly familiar with Tesla as a leading EV car company. Known for its well-designed and tech-forward models, the business sold 1.8 million vehicles in 2023. Not only is that figure astronomically higher than a decade ago, but it also gave the company leading market share in the world last year. This helped Tesla generate $97 billion of revenue in 2023.

It's understandable to assume that several years from now, most companies will probably look similar to their current state. That's certainly true with more mature industries that undergo minimal change and experience less disruption.

That's not necessarily the case here. The auto sector has totally changed in the past decade, primarily thanks to Tesla's ascent. Many industry observers believe that in the future, EVs will make up more cars on the road, which is a safe assumption, despite weaker demand recently. Consequently, a decade from now, Tesla will likely still be a designer, manufacturer, and seller of EVs.

Possibility of a new business model

Elon Musk, Tesla's visionary founder and CEO, likes to constantly remind investors that this is not a car company, but instead, it's an artificial intelligence (AI) and robotics enterprise. While there might be some merit to this proclamation, as things stand today, this is still a business that sells vehicles.

However, Tesla is heavily focused on building out its AI capabilities, particularly as they pertain to the introduction of full self-driving (FSD) vehicles. The ultimate goal for Tesla is to operate a worldwide robotaxi service, something Musk says will experience "quasi-infinite" demand. And because there would be no need for drivers, this offering should in theory generate insanely high profit margins.

In this lofty outlook, Tesla could register profitability that mirrors scaled software companies, as it hopes to control the market for autonomous driving technology. There is more optionality as to how the business will look in the long term when you think about the potential for robotics or energy ambitions.

It's anyone's guess when, or if, this will become a reality. Tesla is holding an event in August to discuss more details about the robotaxi plans. But the technology still seems to be a long way off. Moreover, there will be ongoing regulatory hurdles to get FSD capabilities approved in every country.

Gauging expectations

As they sit well off their peak price, shares trade at a price-to-earnings (P/E) ratio of 43 today. That's a substantial discount to where they were just three years ago. And they demonstrate a more tempered outlook with this business.

Some of Tesla's most bullish investors will think the current valuation warrants a closer look at buying the stock. Should the business not only get back to posting strong revenue and profit growth with its car sales, but eventually launch a global fleet of FSD robotaxis one day, then the stock could be a massive winner over the next decade.

But I don't fall into this group, as I ignore all the hype around what Tesla could become far into the future. Any favorable outcomes are simply too unpredictable for prospective investors to accurately incorporate into their decision-making process.

Therefore, I believe the stock remains overvalued given the state of the business today. And I wouldn't be surprised if it underperforms the broader Nasdaq Composite index over the next 10 years.