Elon Musk is no stranger to crazy statements and in his latest proclamation, the Tesla chief executive says he believes Tesla can be worth as much as Apple.
During a recent earnings call, Musk said that Tesla’s robot software that’ll drive the machines building the Model 3 and the batteries for it, will be so advanced and prove so profitable, that all other manufactures will try to replicate it.
“I think this is just going to be a very difficult thing for other manufacturers to copy. I don’t know what to do if I were in their position,” he said.
Musk prefaced his belief that Tesla could exceed Apple’s $700+ billion market cap by saying “I may be completely delusional” but remains confident in “going at the machine that builds the machine.
“Which involves, by the way, a tremendous amount of software,” he said. “This is not just a bunch of robots that are sitting there. It’s programming of the robots and how they interact. And it’s far more complex than the software in the car.”
Compared to Apple which uses overseas contract manufacturers, Tesla will manufacture most of the Model 3 in-house. Nevertheless, Market Watch rightly points out that in the last decade, Apple has sold over a billion iPhones, iPads and Macs and Tesla has yet to even build a million cars, let alone return anything close to consistent profits.
In 2015, Musk described how he believed Tesla could hit the same market cap as Apple.
“If we’re able to maintain a 50% growth rate for 10 years and achieve 10% profitability number and have a 20 P/E, our market cap would be basically the same as Apple’s is today. Now, that’s going to require a bit —on the order of $700 [billion]. Obviously, getting there will require some significant capex,” he said.