Ark Invest Gives Tesla 25% Chance of Being Worth Over $3 Trillion by 2024

by

Ark Invest has over $11 billion under management and they are huge Tesla bulls. Ark has a new analysis that projects Tesla could have a $7000 per share value by 2024 which would mean the whole company would be worth over $1.2 trillion. The $7000 per share is a combination of ten widely different scenarios.

They give a 25% chance that Tesla will be worth $1500 per share. This is about 2.5 times the current value and Tesla would be worth $300 billion. Tesla would be selling 3.2 million cars in 2024 in this scenario.

There give a 50% chance that Tesla will be worth $2700 per share. This would have Tesla value at $500 billion.

At $500 billion, Nextbigfuture notes that Tesla would be twice as big as Toyota. Tesla would have massive capability to invest in more factories. Ark Invest does not have the more bullish than 50% scenario where Tesla reduces factory costs and grows electric vehicle market share to perhaps double current levels.

Electric cars have a skateboard with all of the batteries and motors. Tesla will be able to add many different models onto the skateboard for the cybertruck.

If the robo-taxi scenario does not arrive then the number of cars and trucks in the world could increase.

There is a 25% chance that Tesla will be worth over $15,000 per share. This would mean Tesla would be worth over $3 trillion.

Nextbigfuture believes that Tesla could have scenarios where they make a lot more factories by 2024. The factory production could be accelerated if Tesla can buy more factories from other automakers.

There is also the scenario where Tesla licenses technology to other carmakers and gets per unit cash without having to pay for factories.

There are also scenarios where the semi-truck business and autonomous trucks becomes huge. The autonomous trucks can be simpler than fully autonomous cars. They need autonomous highway driving and platooning. Platooning is where trucks can safely closely follow a lead truck. Platooning enables trucks to get closer to railroad efficiency.

There are cases where the robo-taxi business is not as good as the bull case but is still very good. There are also the cases where robo-taxi take 2-4 years longer to fully mature. Tesla would then reach $15K+ per share around 2026-2028.

They do not look at the cases where the solar roof and home energy storage business becomes as large or larger than the electric car business.

NOTE: Author of this summary and commentary, Brian Wang of Nextbigfuture owns shares of Tesla

12 thoughts on “Ark Invest Gives Tesla 25% Chance of Being Worth Over $3 Trillion by 2024”

  2. I’m not sure about 3 Trillion but I reckon there is every chance Tesla will at least double in value in the next 4 years.

  3. Right, but to justify their current valuation between VW and TM, they will need to either get to 10 million cars/year or achieve higher margins than the current leaders. That’s a 25x increase.

    I get that that right now a single car + driver/FSD is worth more like $500k each but the chance of that working as promised and getting regulatory approval anytime soon is not 25% in my estimation. Even if Tesla achieves FSD in 2020, there will be other FSD players by the time it’s legal.

  4. Lol, so the *median* outcome is that TSLA becomes as profitable as all of other other top 10 auto manufacturers combined?!

    And the *bear* case is that it merely becomes the most profitable car company in the world?

    Last year Tesla accounted for about 0.5% of the world’s auto production and their cheapest car is 40 grand.

    Hey, I’m a huge fan and convert, but I think Ark is smoking something.

  5. I’m not really persuaded that Tesla has much of a moat outside automotive. Not that they won’t be successful, just I doubt they will see outsized profits in energy.

  7. Because $50k a year in income on a $35k car investment would quickly saturate the market for self driving cars and drive the income per year down to equilibrium.

  8. You would be in err if you attribute all of Teslas future growth possibilities on the automobile unit only. I believe their energy division will make the auto unit look like a small subsidiary.

  9. I think a lot of people still don’t get the scenario pretty near term where Tesla achieves FSD good enough for effective Tesla Network Robotaxi service (when nobody else is even close to real mass produced robotaxis). At that point if any Tesla can earn $50k/yr+, the FSD software option alone is worth more than $50k not $7k it’s at now. 1M vehicles/yr X $50k is $50B/yr clear profit just from that, making TSLA at a conservative PE ratio a trillion + market cap company.

  10. ”NextBigFuture believes that Tesla could have scenarios where they make a lot more factories by 2020.” – 2020?

    ”Electric cars have a skateboard with all of the batteries and motors. Tesla will be able to add many different models onto the skateboard for the cybertruck.” CyberTruck has an Exoskeleton-Unibody not a skateboard but it’s likely an approach just as easy or easier for manufacturing new models. Would be true for Tesla other than CyberTruck.

  11. You can look at their assumptions. Good factory execution is Tesla building more car capacity at $11,000 per unit. This was the $1.6 billion spent on 150,000 cars per year in Shanghai gigafactory. I think Tesla will be able to add more lines and capacity at the China factory easily up to 1 million cars per year at even a slightly lower unit cost. Growing China factory and Berlin and expanding Fremont for a total of 2 million cars per year by 2022 seems clear. They will have the funds to build 1 or 2 more factories starting in 2021, 2022, etc…

  12. Big Musk fan and small Tesla investor here, but how much of this analysis is Ark just trying to make bank on their Tesla holdings?

Comments are closed.