Battery Deal with Tesla Cut From $2.9 B to $7,386; Stock at 296x Forward Earnings
South Korean battery materials supplier L&F slashed the projected value of its 2023 Tesla deal from $2.9 billion to just $7,386, signaling potential volatility in Tesla’s raw-material costs and supply chain. Tesla’s stock trades at 296 times forward earnings after a 28% year-to-date gain, reflecting divided analyst views on its stretched valuation.
1. Premarket Weakness Signals Potential Pullback
In early Monday trading, Tesla shares opened lower, reflecting a 2% slide in premarket activity that leaves the stock on pace for its first weekly loss in six weeks. Volume in electronic trading was roughly 30% above the 30-day average, suggesting institutional participants are taking profits after a nearly 28% gain year to date. Analysts note that this pullback has coincided with softer demand indicators in China, where December vehicle registrations fell 5% month-on-month, and with broader technology sector underperformance in Asia and Europe.
2. Tesla's Expansion of Robotaxi and Humanoid Ambitions
Beyond electric vehicles, Tesla has made strides in its autonomous offerings. The company deployed 100 full self-driving robotaxis in select U.S. markets in November, serving over 10,000 rides in the first month of testing. CEO Elon Musk has set a production target of 50,000 robotaxis for calendar year 2026 and reiterated plans to ramp humanoid robot output to 20,000 units next year. These initiatives account for nearly 15% of R&D spending in the September quarter, indicating Tesla’s push to diversify revenue streams away from traditional vehicle sales.
3. Stock Performance and Valuation Debate
Tesla’s share price has outpaced most auto manufacturers, climbing approximately 17% over the past 12 months versus a 55% gain at its largest U.S. rival and flat performance at others. Yet the stock trades at nearly 300 times forward earnings estimates, compared with an average multiple of 20 in the S&P 500. Bullish investors point to a $2.6 trillion addressable market in autonomous mobility and robotics by 2030, while skeptics warn that production bottlenecks and regulatory scrutiny could weigh on profit margins, currently near 17% on vehicle sales.
4. Elon Musk's Wealth Surge Highlights Company Growth
Data from the Bloomberg Billionaires Index shows CEO Elon Musk added $205 billion to his net worth in 2025, bringing his total wealth to $638 billion. This increase surpasses the combined gains of the top two executives at a leading search company. The spike in personal wealth has been driven largely by Tesla’s market capitalization, which has more than doubled over the past three years. Musk’s stock option exercises this year generated proceeds exceeding $10 billion, of which he reportedly reinvested over 30% back into company shares.