Ron Baron Sees Tesla TSLA Could Reach $2,000 & 30X-50X Return on SpaceX Investment

Ron Baron Sees Tesla TSLA Could Reach $2,000 & 30X-50X Return on SpaceX Investment

On November 16, the S&P 500 announced Tesla's (NASDAQ: TSLA) inclusion in the index on December 21. Baron Capital writes that, if Tesla's growth continues after the S&P 500 rebalances, funds with large Tesla holdings will benefit the most, pointing out that he believes the manufacturer's stock will be worth $2,000 per share in 2030.

Currently, Baron Partners Fund accounts for 39.4% in Tesla of total investments, and Baron Focused Growth Fund in Tesla accounts for 35.9% of net assets.

Source: Baron Capital

Based on an estimate of Tesla's growth, Baron Capital suggests the stock price could reach $2,000 in 2030, 3.3 times the current level. Baron Capital wrote in its FAQs on Baron's Investment in Tesla note:

"Based upon our estimate of Tesla's growth, we believe that Tesla's share price could reach $ 2,000 per share in 2030. That is approximately 3.3X its current level."

In October, speaking to Squawk Box, Baron Funds CEO Ron Baron said that he believes Tesla will become a $2 trillion company. He stressed that Tesla could go from $30-35 billion in sales to $600-700 billion in sales in 10 years. In his opinion, in the coming years, Tesla car sales will grow by 50% annually.

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.

Another major investment that Baron Capital plans to discuss more and more in the next few years is SpaceX. It has invested about $252.5 million in this private company and hopes that over the next 10-12 years it will be able to earn 30X-50X. The foundation explained in the FAQs:

"Baron has invested about $252.5 million (current value is approximately $346 million) in that private business founded by Tesla CEO Elon Musk and we hope can earn 30X-50X over the next 10 to 12 years on that investment! That's right. 30X-50X !!! Of course, there can be no assurance that our investment in what may already be the largest privately owned business in America will be as successful as Tesla."

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Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.

About the Author

Eva Fox

Eva Fox

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.

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