Investors for growth companies are betting on the company's future performance. The more confident they are, and the size the investors predict they will eventu

Investors for growth companies are betting on the company's future performance. The more confident they are, and the size the investors predict they will eventually achieve, determine how much investors are willing to pay. There are enough investors who believe with confidence that Tesla will become big enough to justify the current price, that they buy now. For example, if Tesla ultimately generates $50 Billion in earnings per year, (current annualized earnings around $5 Billion), and are at $1,000/share, they have a P/E of 20 (which is lower than the S&P 500 overall P/E). Current annualized unit sales are about 900,000 cars. They'd need to grow that by 10x to get the earnings that would result in a P/E of 20. GM + Ford combined sold > 10,000,000 cars last year, so Tesla would need to get as big as those two combined to justify a $1 Trillion market cap, gross margins notwithstanding...