In the past, the automotive sector was often viewed as dull and slow to evolve, but Tesla ( TSLA -4.97%) has brought new energy to the field. By making electric vehicles (EVs) widely popular, Tesla has shaken up the industry. Its achievements have pushed its market value to approximately $1.3 trillion.
Those who own shares have seen remarkable gains. If you had put $5,000 into this leading EV company five years ago, here's what your investment would be worth now.
Image source: Tesla.
Tesla stock has delivered impressive returns
Tesla has been an outstanding performer. Over the last five years (up to Oct. 10), its shares have climbed 186%, turning a $5,000 investment into $14,290. Although the outcome is impressive, the journey has been far from steady. Tesla’s stock price is known for its sharp swings. Earlier this year, it dropped nearly 50% before bouncing back in the last six months.
Musk's ambitious plans keep shaping the story
Any thoughtful evaluation of Tesla would likely find that its current valuation is disconnected from fundamentals. The stock trades at a sky-high price-to-earnings ratio of 250. The market seems to overlook weak EV demand and profit margins.
Rather, investors continue to support CEO Elon Musk’s sweeping ambitions. Many believe that in the near future, Tesla will generate significant earnings from robotaxis and humanoid robots, making today’s lofty valuation less relevant. Only time will reveal the outcome.
