Billionaire investor says Tesla (NASDAQ:TSLA) is a $2 trillion stock

It's not as far-fetched as it might sound.

| More on:
Image of a Tesla vehicle driving along an open road

A Tesla Model S. Image source: Tesla

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Billionaire investor Ron Baron thinks the sky's the limit when it comes to Tesla Inc's (NASDAQ: TSLA) valuation. He sees the electric vehicle (EV) company growing fivefold over the next decade as its car and battery businesses soar.

In an interview with CNBC on Wednesday morning, the founder of investment firm Baron Capital Management said: "I've said for a long time I thought it was going to be $1 [trillion] to $2 trillion. With what developments have taken place recently, I think $2 trillion is the right number. So I think it's five times from here."

All revved up

Baron says Tesla's valuation has grown 10 times in the past two to three years, but it's only recently that the stock has caught up. 

He believes car sales will continue to boom, eventually reaching 10 million a year. And he says that the company has an "unbelievable" opportunity in batteries, which he suggests could lead to Tesla generating revenue of anywhere between $750 billion to $1 trillion in the next decade. Its valuation, therefore, could triple or quintuple in that time.

It's an ambitious forecast; last year, the company sold 367,000 Teslas. But Musk himself has set a sales goal of 20 million cars a year by 2027.

Analysts at Deloitte, though, forecast EV sales will reach 31 million in 2030, meaning Tesla would account for one-third to two-thirds of all EVs sold. 

That seems unrealistic, but if Tesla comes anywhere close to achieving either 10 million or 20 million cars a year, the market could respond in kind. And adding in the battery business, as Baron suggests, could make his valuation-expansion multiples seem not so far afield.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

Humanoid robot analysing the stock market, symbolising artificial intelligence shares.
International Stock News

Cathie Wood says if she could only invest in 1 artificial intelligence (AI) stock, this would be it (Hint: It's Not Palantir)

Let's dig into why this stock has earned so much confidence from Wood.

Read more »

Woman in business suit holds both hands out with a question mark above each hand.
International Stock News

Better core AI stock: Nvidia or Palantir Technologies?

Which of these top innovation stocks is the better buy as a core AI holding?

Read more »

A Tesla car driving along a road at sunset.
International Stock News

Prediction: This artificial intelligence (AI) stock could be the biggest winner of the second half of 2025

Let's take a look.

Read more »

Digital rocket on a laptop.
International Stock News

Prediction: After losing more than $1 trillion in market cap earlier this year, this monster artificial intelligence (AI) stock will become the most valuable business in the world by the end of the year

I'll explain why investor enthusiasm is on the rise and detail why I think the stock is poised for an…

Read more »

A tech worker wearing a mask holds a computer chip.
International Stock News

Think it's too late to buy Nvidia stock? Here's the biggest reason why there's still time.

This is just the beginning for AI, and Nvidia is well-positioned to tap into that high growth.

Read more »

Happy man working on his laptop.
International Stock News

Meta Platforms stock will soar over the next 5 years. Here's 1 reason why.

Over the last five years, Meta Platforms stock has been one of the best names to own.

Read more »

Amazon boxes stacked up on a doorstep.
International Stock News

Prediction: This artificial intelligence (AI) stock could be the surprise winner of 2025

The business is strong on many fronts.

Read more »

Hand with AI in capital letters and AI-related digital icons.
International Stock News

Should you forget Nvidia and buy this artificial intelligence (AI) stock right now?

Let's take a closer look.

Read more »