Tesla (NASDAQ: TSLA) could grow to over $2,500 over the next three years, venture capitalist Gene Munster of Loup Ventures told CNBC on Monday, which is a very ambitious target. This turn of events would push Tesla's market capitalization to over $2 trillion.
Munster said Tesla will evolve over the next few years to be much more than just a car company. Although Tesla is already much more than an automobile company at the moment, analysts continue to evaluate it that way, making a big mistake.
The co-founder of Loup Ventures said Tesla is creating new technologies that are a first in the automotive industry—integrating these innovations into its cars and introducing them to new markets. "They're really going to take their tech that they're defining and pioneering with auto and applying it to new markets," he said.
Munster also stressed that Tesla is developing in areas such as insurance, over-the-air updates, and could enter the HVAC industry, all of which can significantly increase the company's profitability.
"Elon has recently said that there's 30% to 40% of the value of the car could be in insurance," he said. "What that means is that they can start offering their own insurance and improve margins. That's high-margin revenue. Not to mention everything they're doing around over-the-air updates with autonomy and what they can even do around HVAC."
Munster said Tesla will continue to evolve and become a technology leader in the next decade. "This company is going to continue to evolve and be a tech leader in the next decade, I'm on board with that," he said.
Traditional auto companies have failed to develop and adapt in a timely fashion—and now they may have lost their opportunity to really compete with Tesla. However, Volkswagen and General Motors are in a slightly better position to have a remote chance at competing with the California-based company. "But really there's no substance, competition—again, they're going to evolve outside of cars longer-term," Munster said of Tesla.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.