Tesla in 2023: A Return to Reality, The Start of the End or Time to Buy?
Damodaran provides an updated DCF valuation of Tesla, revising his November 2021 estimate downward to $130/share (vs. $143 market price on January 25, 2023) due to higher cost of capital, moderated margin assumptions, and signs that Tesla is subject to universal business laws governing growth, risk, and reinvestment tradeoffs. The article reflects on three decades of Tesla valuation mistakes, examines the risks of personality-driven companies, and discusses how political polarization increasingly affects investment decision-making.
Metrics in this report
10.15%percent
Tesla January 2023 valuation discount rate
6%percent
Tesla November 2021 valuation discount rate
9.6%percent
median
US companies January 2023
16.57%percent
Tesla 2022 actual performance
16%percent
target
Tesla long-term assumption by Damodaran
12.06%percent
Tesla November 2021 valuation baseline
$73 billiondollars
Tesla 2022 actual (vs. $64 billion 2013 steady-state estimate)
25%percent
Tesla Q2 2022 (slowed from 2021 pace)