If You'd Invested $10,000 in Tesla a Decade Ago, Here's How Much You'd Have Today

In the past decade, few stocks have delivered life-changing returns like Tesla (NASDAQ: TSLA). If you had bought $10,000 in Tesla stock 10 years ago, that investment would be worth a staggering $217,900 today.

With CEO Elon Musk at the helm, the company has achieved impressive scale that has historically hounded upstart automakers and has evolved into a speculative play on self-driving vehicles, energy, and other emerging technologies. Here's what has driven Tesla's growth and what investors have to look forward to.

Tesla's scaled electric vehicle business sent the stock soaring in the past decade

Tesla bucked the traditional automotive industry business model with direct-to-consumer sales, bypassing dealerships and giving the company full control over its customer buying experience. Its vertical integration helped lower assembly costs and gave it a gross margin that crushed industry peers in the early 2020s.

Over the years, Tesla did an exceptional job scaling its manufacturing capabilities, starting with key expansions in Fremont and Shanghai. This growth, coupled with strong tailwinds from regulatory credit sales, helped Tesla turn cash-flow positive and GAAP (generally accepted accounting principles) profitable, sending the stock soaring and earning it a spot in the S&P 500 index in late 2020.

Here's what could drive Tesla's growth over the next decade

While Tesla has done an excellent job scaling up its EV business, the company looks to achieve more technological breakthroughs under Musk, which is why it trades at such a lofty valuation.

The automaker continues to develop its end-to-end self-driving software and build out its ride-hailing network infrastructure and dedicated autonomous vehicle platform, which could open up high-margin recurring software revenue through subscriptions or other offerings.

TSLA PE Ratio data by YCharts

Additionally, it is leveraging its battery manufacturing footprint to expand its Megapack and Powerwall offerings, which can address the power needs for utility, industrial, and data center operators. These battery storage systems could prove hugely useful in helping utilities stabilize intermittent renewable power grids.

Meanwhile, its Optimus robot is another moonshot project that could eventually account for a majority of Tesla's long-term value, according to Musk. These general-purpose robots are an idea straight out of science fiction, and could revolutionize and serve a wide range of purposes for both business and personal use.

Is Tesla stock a buy?

Analysts project Tesla's earnings to grow at a 24% compound annual rate from 2025 through 2028. With 2028 non-GAAP earnings per share projected at $3.17, the stock is priced at 100 times those projected earnings, well above the automotive sector and far outpacing major technology stocks.

That said, Tesla investors buying the company today are betting it can achieve huge technological and business breakthroughs with its self-driving vehicles, batteries, and Optimus robots. If Musk succeeds in one or more of these areas, it could send earnings projections higher and set the stage for large returns further down the road.

Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.