This Transportation Stock May Outperform the S&P 500 in 2026

Key Points

• Tesla had a rough end to 2025 but it remains one of the largest EV companies in the world.

• The company totally dominates the American EV market with nearly 60% market share in Q4 2025.

• Elon Musk is the company’s main intangible asset and has a track record of making futuristic technology a reality.

The S&P 500 has been having a rough go of things thus far in 2026. Late last year, things were looking up for the index as it briefly kissed the 7,000 mark for the first time.

But year to date, most recently due to the war between the U.S., Israel, and Iran causing traffic through the Straits of Hormuz to plummet and the price of oil to fluctuate wildly, it’s down about 2%.

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However, the S&P 500 is not the entire stock market, and there are opportunities out there for a savvy investor. Despite facing some serious headwinds in late 2025, Tesla (NASDAQ: TSLA) has a lot of potential to reverse its fortunes and outperform the S&P 500 this year.

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I’m a real live wire

There’s no denying that Tesla had a rough end to its 2025, with auto sales revenue for the year dropping 11% and total revenue declining 3%. However, I think that is a bump in the road rather than the beginning of a long-term decline for the company.

And that makes Tesla’s 11.6% decline year to date a buying opportunity rather than a sell signal.

Let’s start with Tesla’s main competitive edge: It’s the undisputed market leader in electric vehicles (EVs) in the United States. In the fourth quarter of 2025, 58.9% of all EVs sold in the U.S. were Teslas. The next highest was General Motors at 10.8%.

Tesla was also the lone big EV manufacturer to grow its market share year over year. In Q4 2024, Tesla made up 44.4% of all EVs sold. Put simply, when it comes to the American EV market, it’s Tesla on the top and everyone else jockeying for second place.

Globally, Tesla is the second-largest EV manufacturer behind China’s BYD, and it’s one of only two non-Chinese companies in the top five, the other one being Volkswagen in fifth place.

Further, a good chunk of Tesla’s sales decline in 2025, particularly in Q4, is likely due to the end of the EV tax credit late last year rather than anything to do with the company itself, which, with its 4% net profit margin and 0.18 debt-to-equity ratio, remains one of the most profitable and financially stable automakers out there.

Just compare it to General Motors with its 1.5% net margin and 2.08 debt-to-equity ratio. Despite a dip in sales, Tesla is doing just fine relative to many of its peers.

Now, on to Tesla’s X factor.

The futurist

Love him or hate him, CEO Elon Musk is one of the most consequential business leaders of the 21st century. The best example of this is Tesla. Before Musk made EVs attractive, aspirational vehicles, electric cars were a bad joke; no major automaker took them seriously. Now, within a decade of the Model 3’s release, almost every major automaker offers at least one EV in its lineup.

His other venture, SpaceX, is another great example. Since its 2002 founding, the company has become the U.S. government’s go-to rocket company and has conducted 12 separate missions to the International Space Station. It has also caught rockets for reuse, which makes space travel more affordable than ever before.

Musk has had his share of failures, too, and he is often somewhat optimistic about how soon the futuristic technology of his companies will be available, but generally speaking, when he has a goal in mind, he’s very effective at making it a reality.

Tesla’s Robotaxi operation is a good example of both of those things. Musk has been working on autonomous cars through Tesla for years, and back in 2019 he projected Tesla would have 1 million robotaxis on the road by 2020.

That didn’t come to pass, but in 2025, Tesla launched the first Robotaxi service in Austin, Texas, and it is now also available in San Francisco. The Austin robotaxis are taking their first steps toward unsupervised operation, though they still require a safety monitor to follow along in a separate vehicle if they are operating without one in the car itself.

In early 2026, Tesla announced it would be expanding the operation to several other cities, including Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas, in the first half of this year.

With that in mind, and with the SpaceX initial public offering (IPO) a hotly anticipated but unconfirmed thing, the best way to invest in Musk’s futurism is Tesla. And, despite the fact that his vision often takes longer to implement than his projections suggest, he does usually accomplish the goals he sets his mind to.

I haven’t even really touched on the Optimus robots because they’re less related to the transportation side of Tesla’s business, but the prototypes are impressive and Musk projects they will go on sale by the end of 2027.

Whether the company can achieve that in so short a time frame remains to be seen, but if I had to place a bet on which tech CEO would make robot butlers a reality, Musk would be at the top of that list.

So give Tesla a look. If Musk keeps achieving his goals, the odds of it outperforming the S&P 500 this year are good.

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James Hires has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company and General Motors. The Motley Fool has a disclosure policy.