Johnny Rice, The Motley Fool

Sat, Jun 14, 2025, 8:24 AM6 min read

• Tesla's stock has been on a roller coaster for the last six months, down nearly 16% this year.

• Although it continues to be one of the most profitable EV companies, its sales have been plummeting recently.

• CEO Elon Musk has done significant damage to Tesla's brand around the globe.

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This year has already proven to be quite a roller coaster for investors. After falling nearly 19% in the span of just a few weeks, the S&P 500 recovered almost as quickly as it fell, now hovering just below its peak in February.

Still, that rollercoaster ride pales in comparison to that of Tesla's (NASDAQ: TSLA) stock. Investors watched shares slide more than 50% from their high near the end of last year through April, before rebounding a whopping 62% and again falling nearly 20%.

This recovery has been primarily driven by the return of the company's CEO, Elon Musk, whose absence has been widely considered as a major driver of the stock's precipitous decline. Now, however, his disagreement with President Donald Trump's "Big Beautiful Bill" is worrying investors. So, with all of this up and down and its inimitable leader back at the helm, it's a good time to ask: Where will Tesla stock be in five years?

There's no denying that Musk has a compelling vision of the future. Robotaxis and personal robots easily capture the imagination. However, it's critical for investors to delineate between what is and what could be. At its core, Tesla is a car company, specifically an electric vehicle (EV) maker; roughly 90% of the company's 2024 revenue came from its EV business.

And from this perspective, Tesla is impressive. As EV competitors like Rivian and Lucid continue to deliver net losses, Tesla has operated in the black since 2020. And when compared to legacy carmaking giants, Tesla's profitability stands out: Despite having about half the sales of Ford or General Motors, Tesla makes more in profit. The stark difference is clear in the chart below.

Now, as impressive as this is, you may notice the direction of Tesla's net income over the last year. In both of the last two quarters, Tesla's net income fell by at least 70% year over year.

This downward trend is reflected in the company's sales as well, although that's hard to make out in the chart because of the scale. Tesla's top-line revenue fell by roughly 9% year over year in two of the last five quarters. In two others, it grew by just over 2%, a rate you might call anemic. That is not the kind of growth you want to see from a company as highly valued as Tesla.