Billionaire investor Ron Baron believes Tesla will become a $2 trillion company. He stressed that Tesla (NASDAQ: TSLA) could go from $30-35 billion in sales to $600-700 billion in sales in 10 years.
Baron told Squawk Box on Wednesday that he believes Tesla vehicle sales will grow 50% annually in the coming years. He said the suppliers are not keeping up with Tesla. For example, Nvidia had no intention of developing chips fast enough because they supplied them to other car companies that didn't need chips so quickly. So Tesla had to develop its own chips.
Baron said investors are not considering various factors, such as what happens when Tesla switches to autonomous driving, ride-sharing, a more powerful (and more affordable) battery than others. Also, he stressed that the California manufacturer is working hard to develop a new battery pack.
"The batteries are the critical point that's allowing - stopping the company from growing even faster. Getting enough batteries they make the money, investments in research for chips. They invest money for batteries because the battery companies aren't investing fast enough."
Baron's investment firm owns more than 7.3 million Tesla shares as of September 30. They were acquired at an average price of $43.07 per share, according to the firm. It has made about 10 times its money in investing in Tesla.
“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,” Baron said.
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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.