Should You Pay Up For Tesla’s Narrow Lead Over Its Peers?
Tesla (TSLA) earns a better operating margin than General Motors and Sunrun, its two peers here, and trades at 310 times earnings, the highest of the three. General Motors’ 37.8 times rests on trailing earnings that include a loss quarter, so it is not comparable to a clean year. The lead is real but narrow: it is a margin lead, and a thin one. The price rests on a robotaxi, robot, and chip build-out whose capital spending management expects to keep growing for two to three more years.
Is Tesla Really Ahead Of General Motors?
On the business, yes. Over the last twelve months Tesla grew revenue 11.8% on an operating margin of 4.6%. General Motors saw revenue decline 1.1% on a margin of 1.0%.
The stocks went the other way. General Motors stock returned 41.2% over the past twelve months, while Tesla fell 14.5% and still carries the group’s richest multiple.
| TSLA | GM | RUN | |
|---|---|---|---|
| Market Cap ($ Bil) | 1,179.1 | 73.7 | 2.0 |
| PE Ratio | 310.0 | 37.8 | 5.1 |
| LTM Revenue Growth | 11.8% | -1.1% | 63.2% |
| LTM Operating Margin | 4.6% | 1.0% | 2.7% |
| 12M Stock Return | -14.5% | 41.2% | -46.4% |
Sunrun shows that growth alone earns no premium here: it grew revenue 63.2% over the last twelve months, the fastest of the three, yet trades at 5.1 times earnings, the lowest multiple. At 310 times earnings, investors are paying Tesla for what it is building beyond the car.
What Is Tesla Selling Beyond The Car?
It starts with software. Management says full self-driving (FSD) is one of the main reasons customers come to look at a Tesla. About 55% of North American deliveries in Q2 2026 had an FSD subscription enabled at delivery. Tesla has removed the purchase option in most markets, so it expects most future growth in FSD revenue to come from subscriptions.
An early version of Tesla’s next FSD software already runs its robotaxi fleet, which management says has driven more than 380,000 unsupervised miles with zero notable incidents. Management expects the fleet’s weekly miles to keep growing by more than 10% a week. Cybercab production has started.
Then comes Optimus, the humanoid robot management expects to be the biggest product ever. Management also warns that the early part of the Optimus ramp will be flat and long. Every part is new, and there is no existing supply chain, so Tesla is building one or making the parts itself.
What Does Tesla Have To Show For The Spending?
Management expects capital spending of more than $25 billion in 2026. It expects capex to rise further in the second half of 2026 and is securing debt facilities that would let it borrow up to $30 billion.
Free cash flow is still positive over the trailing twelve months, but it turned negative in Q2 2026 as capex more than doubled from Q1. Management also expects operating expenses, mostly research and development, to keep growing in 2026 and beyond. Those expenses come straight out of the operating margin that puts Tesla first in its group.
So the proof has to show up as operating profit, not as miles driven or robots built. A nearer test is regulatory: the auto safety regulator, the NHTSA has ordered Tesla to answer by September 30 whether it properly self-certified its autonomous Cybercab. For a wider check, our five-factor stock scorecard ranks every stock on growth, profitability, stability, resilience, and valuation, putting Tesla’s lead and its price in one view.
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