One of the more successful investors/hedge fund managers of recent years, Ron Baron, recently made comments about Tesla Motors blowing up over the next few years, and that “all of us will likely be Tesla customers in 25 years.”
While the words that come out of the mouths of those involved in the financial industry should always be taken with a grain of salt, the comments certainly seem worth taking note of. The “self-made billionaire,” who runs the investment firm Baron Capital Group, is actually considered to be something of “conservative investor,” not the sort that’s always looking for a quick buck. This seems to give the comments a bit more weight.
Now, of course, most of our readers don’t need to be convinced of the potential inherent in Tesla’s current position — the company certainly does seem to be on the verge of completely blowing up in scale. But such things can always change, businesses fail all the time.
With regard to Baron’s comments — in his latest quarterly report (via his firm) he also noted that he is a “fan” of Elon Musk and Tesla Motors, and that the company has a “built-to-last” quality to it, that sets it apart from its competitors with regard to near and far-term prospects/opportunities.
Sister site GAS2 provides us with more:
While they may only make a 1 million cars per year within the next decade, farther out the automaker could end up rivaling GM or Toyota in its size as EVs grow in popularity. Citing the early days of the auto industry in a CNBC interview as an example of why one technology become so predominant (the internal combustion engine), Baron says that the time is ripe for the switch to be made to cheaper electricity propulsion. Right now though, automakers, unions, and car dealers are all standing in the way of EVs, mostly because it could cut into the profit margins, jobs, and service these entities are used to.
But Baron thinks along the same lines that I do; ten years down the road, Tesla owners could just spend a few thousand dollars on a new battery pack, and keep driving their old EV; no need to buy a whole new car, right? Elon Musk is building a car company with the potential to last long term, and come to dominate an emerging market where most conventional automakers are scared to tread.
With all the excitement surrounding Tesla’s stock in recent days, it’s hard to say how much of the hype corresponds to reality, and how much to wishful thinking. Musk does seem to have built himself something of a cult following as of late — whether that faith will match up with the eventual unfolding of events, or not, remains to be seen. The next couple of years will be exciting, though.
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