Tesla Will Likely Dominate S&P 500 Index by 2030, Says Report

Tesla entered the S&P 500 index in December 2020, and the automaker has also made some pretty big moves since, with some analysts expecting the company to overtake others on the index in a big way.

A new report from Austin, Texas firm Worm Capital says Tesla is likely to dominate the rest of the S&P 500 index by 2030, according to Austin-based hedge fund, Worm Capital (via Fast Company)

The report was written by Worm Capital partner Eric Markowitz and researcher Cameron Tierney and comes from a multi-year study on market competitiveness across Tesla’s business — including its vehicles, batteries, trucking and AI.

Tesla is far ahead of competitors as EVs become the norm and new focus for automakers, and Markowitz and Tierney think the automaker’s rapid growth will help them earn a compound annual growth rate (CAGR) of 50 percent by 2030 — far outpacing expectations of the equities of fellow companies.

In the report, Markowitz and Tierney wrote, “Conventional Wall Street analysis consistently undervalues Tesla’s multiple business lines, its massive scale, its expanding margin profile, its leading revolution in complex manufacturing, its approach to real-world AI, its vertical integration, its software stack, and much more.”

Worm Capital says Tesla has the potential to “achieve a 20 million vehicle production run-rate by year-end 2030”, along with over 40% gross margins at scale. The report says Tesla shares could offer a “10x return by 2030–and potentially much more,” based on the company’s current business lines, excluding future robotaxi offerings and real-world AI products.

The key to Tesla’s long-term success, according to Worm Capital, is the company’s vertical integration, while noting there is no EV competition yet for the mass-produced Model 3 and Model Y. The report says “GM’s failed push into EVs is a sign of what’s yet to come.”

The news comes just as Tesla’s Gigafactory Berlin and Gigafactory Austin factories become operational and begin delivering their first vehicles — both expected to offer Tesla another major competitive advantage.