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Elon Musk says Tesla’s valuation is high, but has a good reason for why it’s justified

Credit: @Gf4Tesla/Twitter

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If you ask anyone in the past two years who has invested money into the stock market, it is likely that the word “Tesla” will come up at one point or another. During the COVID-19 pandemic in 2020, which derailed American manufacturing, especially at automotive plants through the United States. Despite a derail in production at Tesla’s Fremont Factory in 2020, the automaker was able to stay relatively stable through a year filled with uncertainty. It ultimately led to a 700% increase in the stock price, along with an infamous Tweet sent by Tesla’s CEO on May 1st: “Tesla stock price is too high imo.”

On the day of Musk’s Tweet, Tesla shares (NASDAQ: TSLA) closed at a pre-split price of $701.30, or $140.26 on adjusted terms. Since then, Tesla stock has multiplied in value by nearly 6.5x, trading at $900.52, down nearly 27% from its 52-week high of $1,243.49, which was recorded in early November.


However, since Musk’s May 1, 2020 Tweet, a lot has changed. Tesla has two new production facilities that are nearly ready for production, it has detailed the public on a revolutionary new battery cell, and it has increased yearly production rates by expanding manufacturing footprints at its two currently-operational plants. While the stock is levels higher than what it was when Musk said the stock was too high, the CEO may have come to terms with why Tesla shares trade at extensively high prices: trust.

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“I’ve tried to just tamp down expectations, saying I think the stock’s maybe too high,” Musk said in an interview with TIME, who recently named him Person of the Year for 2021. “Current valuation is pretty high,” Musk continued, “which suggests that the market has faith in future execution of the company because it’s certainly not based on historical profitability, that’s for sure.”

Elon Musk is TIME Magazine’s 2021 Person of the Year

While Tesla is a company that has revolutionized the automotive market on a global scale, Musk has definitely come to terms with the fact that the company’s valuation is not necessarily based on presently-available information. However, innovation is something that the company has basically guaranteed through its products. If not for Tesla, it is likely that the companies like Ford, GM, and Volkswagen would probably not have such a tremendous focus on EVs currently. In fact, many of these automakers would probably be pumping out more ICE vehicles than ever. But Tesla’s market influence through flashy, fast, and futuristic electric cars has forced the long-standing dominators of the global car market to reconsider their strategies.

Tesla’s current valuation is no longer $1 trillion. It currently sits at just over $905 billion, according to CompaniesMarketCap.comwhich tracks the valuations of companies in various sectors. However, Tesla is well over three times as valuable as second-place Toyota, which delivered 9,528,438 vehicles last year. Tesla delivered 499,550. Tesla also has an energy business, which oftentimes goes unnoticed and unaccounted for by analysts. Even still, is this enough to justify the company’s astronomical stock price?

Musk believes the faith from investors must be the reason, and who can blame them. Tesla has not been on time to some of its deadlines, but in a world of uncertainty, many companies have not performed well since the pandemic began. Take previously mentioned Toyota, for example. Despite selling over 9.5 million cars last year, it was an over 11% decrease from 2019. Tesla is continuing to build upon an already solid foundation for its cars and its company, and investor faith, which is evident if you know any Tesla stockholder, is at an all-time high.

Disclosure: Joey Klender is a TSLA Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Elon Musk

Elon Musk is now a remote DOGE worker: White House Chief of Staff

The Tesla and SpaceX CEO Elon Musk is no longer working from the West Wing.

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Credit: Elon Musk/X

In a conversation with the New York Post, White House Chief of Staff Susie Wiles stated that Tesla and SpaceX CEO Elon Musk is no longer working from the West Wing.

As per the Chief of Staff, Musk is still working for DOGE—as a remote worker, at least.

Remote Musk

In her conversation with the publication, Wiles stated that she still talks with Musk. And while the CEO is now working remotely, his contributions still have the same net effect. 

“Instead of meeting with him in person, I’m talking to him on the phone, but it’s the same net effect,” Wiles stated, adding that “it really doesn’t matter much” that the CEO “hasn’t been here physically.” She also noted that Musk’s team will not be leaving.

“He’s not out of it altogether. He’s just not physically present as much as he was. The people that are doing this work are here doing good things and paying attention to the details. He’ll be stepping back a little, but he’s certainly not abandoning it. And his people are definitely not,” Wiles stated.

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Back to Tesla

Musk has been a frequent presence in the White House during the Trump administration’s first 100 days in office. But during the Q1 2025 Tesla earnings call, Musk stated that he would be spending substantially less time with DOGE and substantially more time with Tesla. Musk did emphasize, however, that DOGE’s work is extremely valuable and critical.

“I think I’ll continue to spend a day or two per week on government matters for as long as the President would like me to do so and as long as it is useful. But starting next month, I’ll be allocating probably more of my time to Tesla and now that the major work of establishing the Department of Government Efficiency is done,” Musk stated.

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Elon Musk

Tariff reprieve might be ‘Tesla-friendly,’ but it’s also an encouragement to others

Tesla stands to benefit from the tariff reprieve, but it has some work cut out for it as well.

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tesla employee
(Photo: Tesla)

After Secretary of Commerce Howard Lutnick made adjustments to the automotive tariff program that was initially announced, many quickly pointed to the reprieve as “Tesla-friendly.”

While that may be the case right now, it was also a nudge of encouragement to other companies, Tesla included, to source parts from the U.S. in an effort to strengthen domestic manufacturing. Many companies are close, and it will only take a handful of improvements to save themselves from tariffs on their cars as well.

Yesterday, Sec. Lutnick confirmed that cars manufactured with at least 85 percent of domestic content will face zero tariffs. Additionally, U.S. automakers would receive credit up to 15 percent of the value of vehicles to offset the cost of imported parts.

Big Tesla win? Sec Lutnick says cars with 85% domestic content will face zero tariffs

“This is ‘finish your cars in America and you win’,” Lutnick said.

Many were quick to point out that only three vehicles currently qualify for this zero-tariff threshold: all three are Teslas.

However, according to Kelley Blue Book’s most recent study that revealed who makes the most American cars, there are a lot of vehicles that are extremely close to also qualifying for these tariff reductions.

Tesla has three vehicles that are within five percent, while Ford, Honda, Jeep, Chevrolet, GMC, and Volkswagen have many within just ten percent of the threshold.

Tesla completely dominates Kogod School’s 2024 Made in America Auto Index

It is within reach for many.

Right now, it is easy to see why some people might think this is a benefit for Tesla and Tesla only.

But it’s not, because Tesla has its Cybertruck, Model S, and Model X just a few percentage points outside of that 85 percent cutoff. They, too, will feel the effects of the broader strategy that the Trump administration is using to prioritize domestic manufacturing and employment. More building in America means more jobs for Americans.

Credit: Tesla

However, other companies that are very close to the 85 percent cutoff are only a few components away from also saving themselves the hassle of the tariffs.

Ford has the following vehicles within just five percent of the 85 percent threshold:

  • Ford Mustang GT automatic (80%)
  • Ford Mustang GT 5.0 (80%)
  • Ford Mustang GT Coupe Premium (80%)

Honda has several within ten percent:

  • Honda Passport All-Wheel-Drive (76.5%)
  • Honda Passport Trailsport (76.5)

Jeep has two cars:

  • Jeep Wrangler Rubicon (76%)
  • Jeep Wrangler Sahara (76%)

Volkswagen has one with the ID.4 AWD 82-kWh (75.5%). GMC has two at 75.5% with the Canyon AT4 Crew Cab 4WD and the Canyon Denali Crew Cab 4WD.

Chevrolet has several:

  • Chevrolet Colorado 2.7-liter (75.5%)
  • Chevrolet Colorado LT Crew Cab 2WD 2.7-liter (75.5%)
  • Chevrolet Colorado Z71 Crew Cab 4WD 2.7-liter (75.5%)

These companies are close to reaching the 85% threshold, but adjustments need to be made to work toward that number.

Anything from seats to fabric to glass can be swapped out for American-made products, making these cars more domestically sourced and thus qualifying them for the zero-tariff boundary.

Frank DuBois of American University said that manufacturers like to see stability in their relationships with suppliers and major trade partners. He said that Trump’s tariff plan could cause “a period of real instability,” but it will only be temporary.

Now is the time to push American manufacturing forward, solidifying a future with more U.S.-made vehicles and creating more domestic jobs. Tesla will also need to scramble to make adjustments to its vehicles that are below 85%.

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Tesla Cybertruck RWD production in full swing at Giga Texas

Videos of several freshly produced Cybertruck LR RWD units were shared on social media platform X.

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Credit: Joe Tegtmeyer/X

It appears that Tesla is indeed ramping the production of the Cybertruck Long Range Rear Wheel Drive (LR RWD), the most affordable variant of the brutalist all-electric pickup truck.

Videos of several freshly produced Cybertruck LR RWD units were shared on social media platform X.

Giga Texas Footage

As per longtime Tesla watcher Joe Tegtmeyer, Giga, Texas, was a hotbed of activity when he conducted his recent drone flyover. Apart from what seemed to be Cybercab castings being gathered in the complex, a good number of Cybertruck LR RWD units could also be seen in the facility’s staging area. The Cybertruck LR RWD units are quite easy to spot since they are not equipped with the motorized tonneau cover that is standard on the Cybertruck AWD and Cyberbeast.

The presence of the Cybertruck LR RWD units in Giga Texas’ staging area suggests that Tesla is ramping the production of the base all-electric pickup truck. This bodes well for the vehicle, which is still premium priced despite missing a good number of features that are standard in the Cybertruck AWD and Cyberbeast.

Cybertruck Long Range RWD Specs

The Cybertruck LR RWD is priced at $69,990 before incentives, making it $10,000 more affordable than the Cybertruck AWD. For its price, the Cybertruck Long Range RWD offers a range of 350 miles per charge if equipped with its 18” standard Wheels. It can also add up to 147 miles of range in 15 minutes using a Tesla Supercharger.

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Much of the cost-cutting measures taken by Tesla are evident in the cabin of the Cybertruck LR RWD. This could be seen in its textile seats, standard console, seven-speaker audio system with no active noise cancellation, and lack of a 9.4” second-row display. It is also missing the motorized tonneau cover, the 2x 120V and 1x 240V power outlets on the bed, and the 2x 120V power outlets in the cabin. It is also equipped with an adaptive coil spring suspension instead of the adaptive air suspension in the Cybertruck AWD and Cyberbeast.

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