Elon Musk (Photo : REUTERS/Rebecca Cook)
The confident Elon Musk thinks Tesla will be the next Apple in 10 years and cites just one reason to achieve such historical feat.
During the recent conference call, the CEO of Tesla Motor reveals his goal for the company to achieve Apple-sized market by 2015. Tesla, Musk claims, is expected to be worth as much as Apple by the year 2025.
In the conference, Musk highlighted Tesla's successful production of 35,000 vehicles for 2014. In United States, the company's Supercharger network currently spans from coast to coast. Musk's Supercharger network also covers most part of Europe.
Tesla projects up to 70 percent growth in car production for 2015.
Apple, meanwhile, has achieved an estimated worth of $700 billion making it the most highly valued companies in history.
Citing Apple's recent milestone, "if you take this year's revenue, around $6 billion or thereabouts, and if we are able to maintain a 33 percent growth rate for 10 years and achieve a 10 percent profitability number and have a 20 P/E, our market cap would be basically the same as Apple's is today", Musk said in a report by Green Tech Grid.
Musk however noted that Tesla is "going to spend staggering amounts of money on CapEx" to reach its projection.
Tens of billions of dollars must be invested for Tesla to actually reach a production of around 1 million vehicles by 2025.
The company also intends to jumpstart its battery production by 2016. This requires building the Gigafactory that is estimated to cost about $5 billion.
Fabrication facilities have also to be factored in to the equation which altogether requires massive investment.
To date, Musk has yet to prove his ability to satisfy investors and delivers profitable returns on capital spending.
If Tesla cannot generate a profitable return on investment, this will be, as Motley Fool puts it, just another cautionary tale in the auto industry.
