$1.5 trillion – Will Tesla Value This Much by the End of the Decade?

A billionaire stock investor named Ron Baron says that Tesla could be worth %1.5 trillion by the end of the decade. He is a Tesla shareholder as well and added in an interview that: “It’s just starting. We purchased nearly all our shares from 2014 to 2016: 1.62 million shares at an average price of $219.14. Our cost was $355 million. We were widely criticized. Last summer, the stock was something like $230. Now it has tripled. The company went from annual revenue of $2.5 billion in 2013 to $25 billion last year. This year, it could reach $33 billion. In 2024, Tesla could have $100 billion to $125 billion in revenue, and be worth $300 to $400 billion. It is now selling for $150 billion. That is only the beginning. In 2030, it could have revenue of $750 billion to $1 trillion, with operating profit of $150 billion to $200 billion. By then, Tesla could be worth $1.5 trillion, ultimately putting it among the largest and most valuable companies in the world.”

He believes that Tesla will continue being the great electric car company: “It’s very, very difficult for other people to compete. Car companies have a couple of challenges. They spend research money on motors, not batteries. We believe $200 billion to $300 billion has been invested in their internal combustion-engine plants. Those are stranded assets. Challenge two, how will they sell them? Dealers make money not from selling, but from servicing. Electric cars have a fraction of the parts. The guys selling your cars aren’t incentivized to sell electric cars. Then there are communications between the car and the cloud. Tesla’s correcting and changing your car every time you get into it. The dealer isn’t involved.”

The American automaker probably will be on the lead during the next years, based on the number of Gigafactories and the total upcoming production.

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