Why Tesla’s Valuation Rests on Musk More Than Reality: QuickTake

There’s a question that’s sparked countless debates among finance professors, analysts and investors, as well as heated arguments on social media: How much is Tesla Inc. worth? While some see the firm’s $1 trillion market capitalization as justified, others contend that valuation is divorced from reality.

Putting a number on Tesla’s worth depends on how you define the company: as a leading electric vehicle maker or a technology business that could one day revolutionize self-driving capabilities and the field of humanoid robots.

Nicholas Colas, co-founder of DataTrek Research, estimates that Tesla’s share price today is based almost entirely on those ...