Ron Baron’s 2030 Tesla Stock Price Target (Ep. 695)

What do you consider Ron Baron's $4.5 trillion rate target for Tesla by 2030-2032?

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Ron Baron’s 2030 Tesla Stock Price Target (Ep. 695)

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47 Comments

  1. Based on my “Napkin Math” I believe that Ron’s numbers are base case as my bull numbers are significantly higher…

  2. Good analysis. However, I would emphasize energy market disruption more that you appear to here. Growth of 150% from here is nothing to sneeze at. The TAM is huge and Tesla is in the pole position on an S curve that is about to go hyperbolic. Yes, it can look smaller in comparison to Robo-taxi or Optimus in terms of possible future opportunity. But I would argue it’s more certain than those at this point. Musk himself has made this point a few times when he says that Energy will eventually be at least as big as the Auto business. And when he includes Saudi Aramco with Apple as a way of setting the valuation goal in a few years – it reiterates this intent. Tesla has proven leadership with tech and manufacturing capacity just now coming on line to position them as the primary disrupter in Energy in the next few years……

    1. Retail consumers can be fickle, so I agree that the car market is a bigger risk than the energy business. For the energy sector only the numbers matter. Megapacks have already proven themselves to be automatic profit. Tesla can sell every megapack it can make for the next many decades. As close to guaranteed profit as you could ever find. Go Tesla!

    2. Absolutely. Not unheard of for energy to reach a massive scale dependent on:

      -competitors ( highly unlikely they can undercut tesla. Provide tesla quality. Wait times under tesla. Won’t be in the game as long )
      -tesla in house battery supply. Or what they can get from suppliers
      -scaling new factories and when

      The demand to replace peaker plants / off grid communities ( islands ) / Backup for critical storage facilities is off the charts. Then when older mega packs get replaced they buy new version from tesla and tesla recycles most material at a prolly 60-75% reduction in first cost. So the revenue will only go up as the older ones are replaced. Double dipping on the customer as I like to say

      They can sell for as long as the eye sees until there is the next major disruption no one can calculate as all we have is solar. Wind. Batteries for the foreseeable future.

      Along with the more power packs are deployed as well the stickiness of the brand will entrench itself into being one of the biggest energy giants of the future. Unfortunately solar is bunk side of business but not everything can have mega margins

    3. I absolutely agree! EVs, FSD, and Optima are exciting future prospects but Tesla energy is most needed, most under discussed, and shows the most immediate potential for growth.

  3. I know Dave is not actively buying TSLA these days, but the fact that he’s still holding on to his shares despite of his massive gains tells me he’d buy the stock at today’s valuations because of the incredible trajectory the company is on. @DAVE LEE Looking ahead the next 10 years… do you see more potential and less risk for Tesla in 2022 than you did in 2012 ?

    1. I can’t speak for Dave, but I certainly think that there’s less risk now. When I bought in 2018, I really hoped that Tesla would succeed, but I was prepared to lose my investment. I don’t worry about that anymore. I have no idea what the future price will be.

  4. For true basic napkin this is fine. Reality will be much higher from an overall product portfolio of tesla. So the 20M @ 50k is more a base number. 20M might be lower but fsd, solar/batteries, robotaxi and robot will catapulte tesla to levels hard to believe at this time

  5. Anybody can have a price target. Wishful thinking for 600 dollars share. I own A Tesla Y and the Stock, I love Tesla. If inflation disappears then tesla will soar to 600 dollars a share.

  6. In earnings call, Elon also alluded to future, as yet unannounced products. The 20 multiple, if I’m not mistaken, is the P/E at that point… but if the market is bullish on Tesla going forward from that point, the PE / multiple could be double that or more, as it is now. It’s a matter of when, not if (in my opinion) that we start building nuclear power plants again. Tesla will be at the front of that. They are already becoming a utility, you can see it.

    1. You are right, but he wanted to keep it conservative. Even with a 10 multiple Tesla and only its car production Tesla could be a 3x compared to todays share price. That’s a great investment. Anything else is icing on top of the cake!

  7. My calculations: 20M cars @ 35K ASP @30% = 210B * 20 PE is 4.2 Trillion Market 🧢 hope this solves the equation not including all other options like energy, bot etc.

    1. Assuming the world economy recovers that PE should be conservative. I also always make conservative long run assumptions. They’re sufficient to still get the largest market capitalisation of any company.

    2. The whole premise depends on the 20 million sales. That’s a very long period of sustained, massive growth. That’s the part of the equation that’s suspect, in my mind. A hell of a lot can, and probably will, happen in that period of time. I own 3,000 shares and two cars.

    3. @The Fish if they’re still growing like that in 2030, the p/e will be far higher than 20. Coke currently has a p/e of 24.

  8. Even with a 10 multiple and only its car production Tesla could be a 3x compared to todays share price. That’s a great investment. Anything else is icing on top of the cake!

    1. My prediction Tesla sells 6 million cars in 2030 makes 4k profit per car that makes 24 billion give them a pe of 10 so the value of the company is 240 billion in 2030 ! So if you want to double your money in 8 years you can pay right now around 40$,if you want to 3X your money you can pay 27$

    2. Mercedes has margins of 28% and trades at PE of 8. Interest rates will revert to 1980s at 7% and EV auto will be valued at 8 PE. In 2023, Tesla will go cash flow negative due to CCP banning sales within China when class action court case of racism against black workers suing Tesla and the directors. Another lawsuit by American Chinese investor suing the board of directors for abetting racism on blacks and hispanics.

  9. Thank you for sharing, Dave! I can’t wait to see all of those S-curves feed into one another. Going to be a truly amazing decade ahead.

  10. I’m a long term Tesla stock holder and I have one criticism of your channel. You never talk about the negative sides of Elon or Tesla.

    It’s like being stuck in an echo chamber sometimes.

    1. Agree. See how Elon musk handles the layoffs at Twitter. Whatever good reason to own Tesla, bah bah bah it does actually feel, I would stay away.

    2. @Bo Stanford No company will compete with Tesla in price the other car companies are built with excessive waist they do not run efficient did you not see that people placed orders for other EV’s so Tesla lowered their prices and the people cancelled the orders and ordered a Tesla the web site in China shut down to many orders placed at one time.Musk is now moving on to bigger and better things like the Tesla Bot that will generate more revenue than cars.✌

  11. If you consider that Tesla will also be selling Semis, vans, and other commercial vehicles, along with consumer passenger vehicles, a $50K average selling price per vehicle is probably reasonable. The fleet average price will be higher due to commercial vehicles.

    1. Ford has been selling tens of millions of vehicles for decades… around the globe… and their stock price hasn’t been able to climb over $20 per share for 20 years.

  12. I remember that a couple of months ago Ron was expecting Tesla to 3X by 2030. My best guess is that the 6X to 7X new stock price prediction involves some inside information by Elon regarding FSD and robotaxi.

    1. True true. Ron was on the inside since he first invested into Elon. Elon knows his support goes way back. Thus I’m sure he has some India’s info of the new products in works and Ron crunching numbers can easily see why he talks about tesla

  13. As always, good explanation of stock napkin evaluations. Couple of missing items from the calcs are Solar (panels plus batteries) and perhaps the most important is energy efficient HVAC systems. Elon has mentioned it many times and that will be an easy business for Tesla to get into as they have done remarkable things with the cars heating/cooling system and scaling that up to residential is a no brainer. Bundle it with a Tesla Solar install and run it through the Tesla App it could be huge for Tesla.

  14. Great summary! If Tesla fails in everything but EVs, it will still be a tremendous investment. Tesla has a huge lead in FSD, Robotaxi, energy, GAI, and Optima. If it succeeds in even one – let alone several – then a Tesla investment will grow even faster.

    1. Mercedes has margins of 28% and trades at PE of 8. Interest rates will revert to 1980s at 7% and EV auto will be valued at 8 PE. In 2023, Tesla will go cash flow negative. Why? CCP banning sales within China when class action court case of racism against black workers suing Tesla and the directors. Another lawsuit by American Chinese investor suing the board of directors for abetting racism on blacks and hispanics.

  15. Regarding FSD: I don’t think Tesla can claim it has truely solved level 5 FSD until a Tesla can navigate the traffic in Mumbai or at least downtown Toronto.
    FSD will be great for robots taxis and premium customers but I don’t think the mass market will be willing to cough up 10k or 20k for FSD.
    The best use case for FSD is likely be in commercial, industrial and military applications where the ROI makes sense.

  16. What I really admire about Ron Baron is that even though he’s twice my age, he still thinks long-term and remains euphoric. The same goes for Warren Buffet, by the way. Dave, please keep up the good work and don’t pay attention to the short-term trolls and their short-term noise. I’m a HUGE Tesla fan, long-term investor and I love your channel!

    1. I’m 82 and despite my concerns about Twitter I’m long on Tesla, hoping it creates significant wealth for heirs!

  17. I am convinced that energy will be huge. More and more research show that we can make it on solar and wind power, but huge amount of batteries will be needed. When Tesla a start to produce their own LFPs, they can really ramp up the energy side.

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