Tesla’s recent stock price rise has come as a shock to many, but not to others who have believed in Tesla (sometimes for more than a decade). One of those strong Tesla bulls has been ARK Invest. ARK has been focused on the larger picture since its inception. So far, this has been the best way to consider Tesla’s potential — in terms of sales, expansion, and apparently stock price as well.
Tesla’s value has grown as it has shown an ability to not only dramatically increase production and sales while other automakers are shrinking, but the biggest potential to blow up in value is if Tesla can master full self-driving technology. At the moment, the Tesla [TSLA] stock price is $748. Ark Invest expects Tesla shares to jump another ten-fold to around $7,000 by 2024. However, it could go even far beyond that if Tesla nails autonomous driving.
“A fully autonomous taxi network could break the mold of a traditional automotive manufacturer’s business model completely,” ARK Invest says in its blog post. “Tesla could shift from a model of one-time transactions at hardware-like margins to a model of recurring transactions at software-like margins, charging passengers per mile and taking a platform fee.”
Without nailing self-driving tech, ARK puts a 2024 price target of $3,400 on the company. Potential futures in which Tesla nails self-driving tech include price targets of $15,000 to $22,000.
ARK Invest isn’t the only one with a strong bullish opinion of Tesla/TSLA. Well known investor and billionaire Ron Baron, whose fund owns more than 1.6 million shares of Tesla, has long had a strongly positive view of Tesla’s promise. In 2014, he said, “all of us will likely be Tesla customers in 25 years.” In 2015, he was behind Elon Musk’s vision of producing 500,000 cars a year in 2020. Tesla’s market cap was $30 billion at the time and he projected a market cap of about $120 billion by this year. The company’s market cap is $135 billion. In 2017, Baron expected the company’s stock price could reach $1,000 by this year. It did get close to that recently. He also said the company “‘may be the most interesting’ company he’s ever invested in over his 46 year career.”
In 2018, Baron projected a 50/50 chance of Tesla pulling in $1 trillion in revenue in 2030. He also said that year, “I think we’re going to make 20 times our money because the opportunity is so enormous. People say, ‘Gee, they’re spending a lot of cash.’ Of course, they’re spending a lot of cash. They’re building factories.” He also pointed out in 2019 that current legacy carmakers are great at making gas and diesel engines but that shifting to battery electric vehicles will be very difficult for them.
Geoffery Chaucer once said that, “But at the laste, as every thing hath end,” which led to the saying “all good things must come to an end,” which means that nothing lasts forever. Consider this when it comes to legacy automakers. Yes, they were great at their peak. They elevated humanity from the horse to better means of transportation. But the cost was high and is being paid by all of life on earth. We are polluting our planet, so this great thing for us needs to end, or as I like to say, evolve. It’s time to evolve our way of transporting ourselves and do so in a way that negates the damage that was done by the current auto industry.
Tesla is not only leading the EV industry in this respect, but it is pushing the limits of what other automakers say they can or cannot do. This is what leaders do. They break boundaries and demand we push ourselves to our limits for the greater good.
Full disclosure: I’m a tiny TSLA shareholder.
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