Electric vehicle (EV) maker Tesla has been a big winner on the stock market over the past decade, with shares rising by a whopping 14,620%. The Elon Musk-led company looks capable of sustaining its impressive run over the next decade as well thanks to the efforts it is undertaking to make the most of the global EV opportunity.
Tesla is laser-focused on expanding its manufacturing capacity. The company recently shipped its 3 millionth vehicle, with the Shanghai plant alone making more than 1 million EVs. Tesla's first EV went into regular production in 2008, so the company has taken its own sweet time to hit the milestone of 3 million cars.
However, it now looks well-positioned to grow its sales at a nice clip. Last month Tesla reported that it has produced 1.1 million cars in the trailing 12 months. It is now capable of producing 2 million cars a year, which is double its capacity in the second quarter of 2021.
The company has set an ambitious target of selling 20 million EVs a year by 2030, indicating that it will continue to aggressively expand its manufacturing footprint to make the most of the growing adoption of EVs. For instance, Tesla's Berlin factory is expected to hit a peak production capacity of 500,000 vehicles annually, compared to the current capacity of 250,000.
Tesla delivered 936,000 EVs last year, so it still has a long way to go to achieve the target it has set for itself by the end of the decade. However, the company plans to clock an annual delivery growth rate of 50% over the long run, and the rapid expansion of its manufacturing capacity indicates that it is moving in the right direction.
With the market for battery-powered electric vehicles expected to hit annual revenue of $212 billion by 2030 from $53 billion last year, Tesla seems to be pulling the right strings to boost sales. Not surprisingly, analysts expect 45% annual earnings-per-share growth from the company.
That's why investors looking to buy a growth stock for the long haul should consider going long Tesla right now, even though it is on the expensive side. Tesla stock trades at nearly 110 times trailing earnings, but the forward earnings multiple of 77 points toward bottom-line growth. While the valuation is rich, Tesla stock's pullback means that it is trading at a relatively attractive multiple.
The stock was trading at 343 times earnings last year. In 2020, Tesla had a price-to-earnings ratio of 1,341. Given the company's projected earnings growth, now looks like a good time to buy this EV play before it becomes more expensive.
