Ark Invest Updated Tesla 5 Year Price Target Will Be Over $6000 per Share

Ark Invest is increasing its 5-year Tesla price target to over $6000 per share.

They are now assuming that 37 million electric cars, trucks and SUVs will be sold in 2024. They had assumed that Tesla’s 17% market share for electric cars would decrease to 11%. They now believe Tesla will not lose market share. It is even possible that they will forecast that Tesla will grow its market share.

Tesla maintaining 17% global market share is a forecast that Tesla will sell about 6.3 million cars in 2024.

This would be about 77% year over year growth in Tesla sales volume from 2019 until 2024.

Year    Cars in Year    Total Cars   Percent Cost Reduction per Wright Law
2019     367000         800000
2020     649590        1450000       14%
2021    1149774        2600000       26%
2022    2035101        4600000       32%
2023    3602128        8200000       47%
2024    6375766       14600000       55%

For over 100 years, the auto industry has enjoyed an 85% learning curve – which has translated into a 15% cost decline with every cumulative doubling of units produced.

Tesla has made a total of about 800,000 electric cars by the end of 2019.

6.3 million cars at $40,000 per car would be $252 billion in annual revenue.

By 2024, Tesla should be able to build electric cars at about half its current costs. Tesla has about 21% margin on its $50,000 cars. This means Tesla cars currently have a cost of about $40,000. Tesla would be able to have costs of $19,000 in 2024. This would mean 33% margin on cars selling at $30,000. Tesla would have net income in the range of $50 billion. The level of profit and net income would depend upon how much is being spent for capital to build more factories and to launch new products.

If earnings were $50 billion in 2024 and growth was still that strong then the PE could be 50. This mean Tesla would be worth about $2.5 trillion in 2024. Maintaining strong growth and even higher earnings and PE would mean Tesla could achieve $4 trillion in stock value. This is just what utter domination of electric cars, batteries, and solar roofs would mean. There could also be the self-driving taxi service revenue as well.

Tesla will also have sales in energy storage, solar roofs, semi-trucks, software and service revenues. The additional non-car products could add 30 or more to Tesla revenue in 2024.

A forecast made at Hyperchart trends out to $180 billion in revenue for Tesla in 2024. Ark Invest could project nearly double the revenue in this Hyperchart for Tesla in 2024.

Written by Brian Wang,
Brian Wang owns shares in Tesla and other companies.

16 thoughts on “Ark Invest Updated Tesla 5 Year Price Target Will Be Over $6000 per Share”

  1. If you look at some of their other commentary they are quite open about saying that Tesla is their biggest position. They are just explaining why.

  2. Do you understand that ARK is a group of innovation focused funds that focuses on disruption? The funds represent the thesis. Their analysis exists to explain why they are making the bets they are. “This is why Tesla is our biggest holding”.
    If people find their analysis of Tesla persuasive they may choose to look into the other holdings and invest in the fund.

  3. Probally a crossover point where it cost more to support the average worker than they can produce. Then what? Pets of AI?

  4. I would say unskilled labor income will only fall part way down this “long way” since for the most part the income of the workers in poorer areas is rising whereas the wages of the workers in developed countries is holding steady, if not increasing. But, there does seem to be less employment opportunities for unskilled workers going forward with more and more automation and this will have serious economic difficulties for them and consequently political destabilization. However, this is problem that will be worldwide.

  5. It’s worth noting that there are 3 funds that begin with the prefix “ARK” and they own a total of ~33% of Tesla shares.
    ARK Industrial Innovation ETF, ARK Innovation ETF, ARK Web x.0 ETF.
    No conflict of interest there…

  6. Tesla is future automated truck/freight convoys, solar, mega battery storage, tunnel transport and of course passenger cars.

  7. Most of Tesla’s future growth will come from its energy products division, not the automobile part, but that won’t be a slouch by any means either.

  8. I think the global market cap of all auto manufacturers is not even 1T. I know Tesla could have other revenue streams, but seems a bit far fetched to hit $6000 price target.

  9. Chinese labor value is falling fast! The limits of debt stimulus and the growing pain of default taking tolls.

  10. The value of human labor is falling fast.

    Is that true?

    Or is it that the value of location is falling fast?

    The returns to human labour in China, or Mexico, or India, or even many African locations is rising quickly. The problem is that if you are an unskilled labourer in a first world nation, then you previously had a big advantage based on your location. There was a huge inequality in unskilled labour pay based purely on where the worker happened to be.
    With the world wide multi-decade reduction in inequality this is going away. And if a worker was previously a beneficiary of this then they will see their income drift downwards until it meets the rising world average. And that is a long way down.

  11. Brian says, right there, in live pixels on your screen, that he is a shareholder in Tesla.
    There is no need to postulate vague hints of nefarious underhand payments.

    Actually, this is probably a good thing for Brian. He gets a constant stream of criticism of his investments, including some very well thought out stuff by people knowledgeable in both finance and EV tech. Anyone with investments needs that to stop themselves believing the always positive spin that they would otherwise be hearing.

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