Could Tesla Motors (TSLA) really hit an unprecedented $4 trillion market cap by 2030? A few bullish analysts are saying it could – and you might just want to listen.
Elon Musk’s electric vehicle company sent shockwaves through the auto industry when TSLA reached a trillion dollar valuation last fall. It has fallen off quite a bit since (hasn’t everything?), but the automaker’s market cap is steadily creeping its way back up to that lofty mark, and some analysts are saying it won’t stop there.
According to Cathie Wood’s ARK Invest, Tesla Inc.’s share price will reach the $3,000 mark by 2025, putting the company’s total market cap as high as $4 trillion in the best-case scenario, according to a research note published here last Friday.
To arrive at this forecast, ARK used a Monte Carlo model with 34 inputs, the high and low forecasts incorporating 40,000 possible simulations. Our bull and bear price targets are the top and bottom quartile outcomes from the simulations, as shown (below).
|ARK’s Predicted Scenarios||2025 Price Target||Significance|
|Expected Value||$3,000||This projection is our base case for TSLA’s stock price in 2025 based on our Monte Carlo analysis.|
|Bear Case||$1,500||We believe that there is a 25% probability that Tesla could be worth $1,500 per share or less in 2025.|
|Bull Case||$4,000||We believe that there is a 25% probability that Tesla could be worth $4,000 per share or more in 2025.|
ARK isn’t alone in predicting big things for Tesla. Gary Black of The Future Fund, told the Miami Herald that the EV industry will reach 60 percent market penetration by 2030, and he anticipates Tesla will own a massive 21 percent of the overall new car market share. On Twitter, Black wrote, “When EV adoption hits 60%, $TSLA with 20% EV share will be viewed a safe haven like $AAPL.”
In another recent research note, Wedbush analyst Daniel Ives noted Tesla’s newly-approved Gigafactory in Germany as an important milestone for the automaker. “The Berlin factory establishes a major beachhead for Tesla in Europe,” says Ives.
With the opening of its new factory in Berlin-Brandenburg, Tesla can significantly increase production for Europe while lowering previous costs of importing vehicles to the continent from China, as it has done in the past.
Interesting stuff, but is it convincing? You tell us — scroll on down to the comments section and let us know if any of these reports will convince you to go long TSLA.
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