Barrons reports that the Louisiana State Employees’ Retirement System (LASERS) has bought a large position in Tesla (TSLA), and also added more Apple (AAPL), Microsoft (MSFT), and General Electric (GE) stock in the 4th quarter. I kind of love the idea of LASERS buying Tesla. Being from Louisiana, I feel a touch of pride considering that I, too, own a few shares. That acronym is pretty iconic.
LASERS, for those outside of my state, provides benefit plans for state employees, people performing hazardous duty services, correctional officers, wildlife agents, peace officers, judges and court officers, and even state legislative officers — and, of course, elected officials. There are at least 100,000 members who receive benefits.
As of June 30, 2020, LASERS managed $12.6 billion in assets. The pension bought 80,900 TSLA shares in the 4th quarter. As of September 2020, it hadn’t owned any TSLA shares, so this is a new purchase. Barrons noted that depending on how one values Tesla, it could either be a $1 trillion company or close to becoming one. Here is a list of the other shares LASERS bought:
- Apple: 664,900, which brought its total to 1.5 million shares.
- Microsoft: 302,500, bringing its total to 686,800.
- GE: 99,200, bringing its total to 543,700 shares.
- Tesla: 80,900 shares — first time buying this stock.
Tesla Could Sell 5 Million EVs By 2030
Tesla’s worldwide success is due to the company revolutionizing the auto industry, taking on the energy industry, and blending the two through the battery industry while also transforming the battery industry and impacting the mining industry. It’s no wonder that this stock is on fire.
Investorplace believes that Tesla will sell 5 million EVs in 2030, along with providing millions of FSD upgrades, solar panels, and energy storage solutions. (Tesla’s aim is to produce 20 million vehicles in 2030.) Investorplace’s piece was inspired by Wedbush Securities’ claim that Tesla will top one million deliveries by 2022 and approach 5 million deliveries by 2030. Wedbush, in a note to its investors, raised its price target on TSLA stock to $950 from $715.
The article noted that not only are EVs taking over the world, but they sit at 4% of global new vehicle sales today. That number will be much higher by 2030 and Tesla controls about 17% of that market today. Tesla has also been expanding its market share for many years and will either maintain or grow that market share.
“When you sit down and work through the math on those numbers, it becomes crystal clear that Tesla will indeed sell 5 million EVs in 2030.”
Approximately 64 million new passenger cars were sold in 2019, and due to the growing population, that number has been growing and should be around 80 million new car sales by 2030. In 2020, total EV unit sales were around 2.9 million cars (between 4% and 5% of the total new car sales), and this penetration rate, the article pointed out, will soar over the next decade.
“A 35% penetration rate in an 80 million new car sales market implies about 30 million new EV sales in 2030.”
The article also pointed out that the math behind TSLA stock fetching a trillion-dollar valuation is there as well. Critics and bears systematically forget that TSLA stock’s growth narrative is more than cars. Tesla also has its auto software business that will sell self-driving packages, and this will add tens of billions of dollars of high-margin revenue to its auto business. And let’s not forget Tesla has a booming energy business as well. In a nutshell, Tesla will provide its services to millions of consumers globally who, by 2030, may drive a Tesla car, have solar panels, and store all their energy on a Tesla battery pack.
With Tesla joining the S&P 500 last year, we will most likely see more states add TSLA to their pensions, and not just states, but many companies providing these benefits for their employees will most likely add TSLA shares as well.
Many critics often misunderstand Tesla and still believe it’s going to go bankrupt any day, but the fact of the matter is this: Tesla has something people want, and despite all odds, Tesla has been very successful at meeting its goals. Tesla will probably have more challenges along its path to success, but from what I’ve seen in the past 2 years I’ve following and supporting the company, Tesla’s way of taking on challenges and using them to grow its brand is simply brilliant. And that’s due to the leadership of Elon Musk and his way of solving problems.
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