What would Tesla be worth without Elon Musk?

In the weeks bracketing Donald Trump’s victory on Nov. 5, Tesla’s stock enjoyed one of the most explosive rides in the annals of publicly traded equities, gaining over 50% and almost half a trillion dollars in valuation in the span of just over a month. That surge reversed four years of poor performance for Tesla’s shares as investors soured on the EV maker’s weakening fundamentals and CEO Elon Musk’s serial promises of fully self-driving cars and an inexpensive mass-market model that proved an ever-receding horizon.

Then in October, Musk recharged his stock via a fresh pledge to start producing the long-awaited Tesla Cybercab by mid-2025. And investors reckoned that Musk’s newfound, headline-grabbing status as the highest-profile member of the Trump economic team in heading the Department of Government Efficiency (DOGE), as well as his bromance with his boss, would somehow restore the buzz around Tesla. Musk appeared to be performing a never-before-seen coup in taming the federal bureaucracy. His early wins at the White House reminded folks and funds of the supposedly enduring Musk magic, and renewed belief in his epic vision for the EV giant.

But in the last 10 weeks, the controversy Musk has unleashed in Europe now that he’s center stage in the Trump administration, especially by backing far-right political parties, as well as terrible news from China, have crushed Tesla’s shares, sending their prices back to where they started the takeoff, and retesting levels at the start of 2021. Put simply, Musk’s failed promises are pushing investors to examine what they’ve long ignored—Tesla’s bedrock value as a super-capital-intensive automaker—and ponder whether Musk’s gauzy promises of things to come remotely justify its still-gigantic market cap.

In reality, the math dictating the heroics Tesla must perform to deliver good returns from here looks impossible to achieve. So let’s explore the company’s worth as a maker of electric vehicles and batteries and separate out what we’ll call the Musk Magic Premium, the extra market cap awarded for the “forthcoming” ventures Musk has failed to deliver but that still rally hordes of believers.

We’ll begin by posing arguably the top question in American business: What would Tesla be worth without Elon Musk?

To answer that question, this writer used conventional guideposts to reach an accurate valuation based on the products and services Tesla currently produces and sells, sans the wonders Musk is predicting. To establish repeatable, durable numbers for earnings, I eliminated special items, notably the $589 million write-up for the Bitcoin trove on Tesla’s books allowed by new accounting rules, and the almost $6 billion tax benefit in Q4 of 2023. I also removed estimated after-tax income from sale of regulatory credits to competing manufacturers, a sideline that Musk acknowledges will disappear, though the rate of decline remains uncertain.

Using that template, Tesla posted fundamental earnings of $4.2 billion in 2024. To establish a reasonable market cap, we first need to set an appropriate price-to-earnings (P/E) ratio. For the 10 largest automakers outside of China, a group that encompasses Ford and GM in the U.S.; Stellantis, Mercedes-Benz, BMW, and Volkswagen in Europe; and Toyota, Hyundai, Nissan, and Suzuki in Asia, the average is 6.9; only Nissan beaks double-digits at 15.1. Still, a huge share of Tesla’s sales flows from China, the world’s fastest-growing EV market by far, and the Chinese players sport higher multiples than anywhere else, often 20 or above. So we’ll give Tesla a P/E of 20, which is still three times the norm for carmakers outside the world’s second-biggest economy.

Multiply $4.2 billion by 20 and you get a market cap of $84 billion. But Tesla’s valuation as of midafternoon on Monday, March 3, stood at $955 billion. Hence it’s selling at 227 times its 2024 underlying profits (the cap of $955 billion divided by profits of $4.2 billion)—and that’s after an historic selloff. Those adjusted earnings, by the way, are less than half the $11 billion, using the same metric, that Tesla recorded in 2022. This vaunted growth juggernaut is actually shrinking as a profitmaker. Investors are baking in tons of extra worth centered on great expectations that Musk will score on robotaxi fleets, and sales of FSV software to existing Tesla owners so they can run their cars like customer-owned Ubers and Lyfts when they’re not driving them. That “Musk Sorcerer” bounty amounts to the difference, a staggering $873 billion (the $955 billion cap minus Tesla’s status quo estimate of $82 billion).

Of course, Tesla is the riskiest of stocks, as shown by its wildly careening chart since the election. Investors will want at least a 10% annual return to strap themselves in for the lurching ride. Since Tesla doesn’t pay a dividend, reaching that number would require its stock price to double in seven years, from $282 today to around $564. We’ll assume the share count remains at today’s levels. In that scenario, the market cap would wax twofold as well, hitting $1.91 trillion by early 2032.

Grab a quick Scotch. We need to make another assumption to posit the net profits goal seven years from now, and that’s the “ending” P/E. We’ll put the figure at 30, well above the S&P’s multidecade average, and a mark that would still tag Tesla as a relative tech sprinter even after staging one of the fastest expansions ever witnessed. The earnings bogey for 2023 is thus $64 billion, the $1.91 billion valuation divided by a P/E of 30.

Reaching the “target” of $64 billion mandates that profits jump 15-fold from today’s $4.2 billion in the seven-year interval. That’s a leap of15 times; Tesla’s after-tax profits would need to increase at a compound rate of 47% per year. If Musk devotees succeed in driving Tesla stock back to anywhere near the all-time peak notched in December, the bar for future profit growth gets even more outrageous and unvaultable. The average annual earnings increases baked in at the pinnacle valuation of $1.57 trillion: 60% a year. The more Musk followers believe, the more impossible the challenge to reward them appears.

The rub is that just when Tesla needs a booster rocket, its engines are fizzling. Last year, its basic total revenues from carmaking rose just $200 million or 0.2% over 2023, meaning they actually fell over two points adjusted for inflation. And this year has started badly: In January 2024 compared to the same amount last year, revenues tumbled 50% in Europe and 11% in China.

Musk may succeed in making Tesla a far bigger enterprise by launching fleets of robotaxis to duel Uber and Waymo, and making and selling FSD software to its current owners. But gaining size isn’t enough. It will take both loads of new capital investment and huge returns on each dollar Musk plows into new projects for Tesla to sound the horn. It’s unclear that Tesla can generate sufficient profits on its own to finance Musk’s blueprint. If not, he’ll be forced to sell stock and raise debt. The more outside cash he marshals, the tougher his task becomes: As the share count grows, so does the total earnings above $64 billion needed to multiply the share price 15-fold by 2032, the requirement for handing investors less-than-stupendous annual gains of 10%. Musk must secure the huge rates of return on those investments, funded internally and if necessary externally, to furnish the quicksilver profit ramp built into the share price.

Therein lies the fantasy. As Musk pours tens of billions into building Tesla-owned robotaxis and obtaining the data-center gear to operate the navigation equipment in the FSV fleets, he’ll face plenty of competition from players developing and deploying AI to prosper in exactly the same futuristic ventures. That competition will compress his margins, and slow the flywheel that he effectively claims will keep spinning: a flow of fabulously profitable products that generate hoards of cash to hatch and make more fabulously profitable products. Musk recently claimed Tesla could hike earnings 10-fold in the next five years. He’s right in auguring what it will take to reward shareholders. He’s just not showing much sign of getting there.

As Musk flamboyantly attacks “fraud, waste, and abuse” from his perch in the White House, he’s short on showing tangible proof from the plant floors in Austin, Berlin, and Shanghai that he’s mounted a credible plan. America’s “Music Man” is still garnering a huge Musk Magic, Oscar-worthy premium for Tesla’s shares. As Musk attacks the perceived ills of the U.S. economy, Tesla’s woes just keep growing.

This story was originally featured on Fortune.com