Billionaire investor Ron Baron believes Tesla’s total market capitalization could swell to $4 trillion over the next 10 years.
Tesla’s current market cap stands at around $650 billion, so reaching $4 trillion would represent over a 6-fold increase.
He expects the next generation Tesla model to cut costs in half and enable 33% lower prices by 2025. Baron says Tesla’s energy storage business is already a $6 billion per year revenue stream that will triple in the next year, and eventually become 30 times larger.
Tesla’s Autonomous Driving Advantage
Baron argues that Tesla’s Dojo supercomputer will give it unmatched computing power and data compared to competitors. He believes Tesla’s software-based approach to autonomous driving gives it a major cost advantage over competitors like Cruise, which require expensive specialized hardware.
Massive Profit Potential for Tesla
Baron believes that as Tesla scales production to 20 million vehicles per year, it could achieve $200 billion in annual gross profits from the car business alone, plus another $120 billion from the energy business, and further multipliers from Tesla’s Dojo, Full Self-Driving, and robotaxi capabilities. This could result in total Tesla profits of $650 billion to $1.3 trillion.
Bullish Outlook on Tesla’s Future
Overall, Baron is extremely bullish on Tesla’s future prospects and believes the stock will rise “huge” from current levels as the company executes on its ambitious plans.
He sees Tesla’s robotaxi business, enabled by its advanced autonomous driving technology, as the key long-term driver of value for the company.
