Tesla TSLA Receives $500 PT by 2026 from ARK Invest, Based on EVs Alone

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ARK Invest has updated its Tesla price target for 2026. Including the stock split, and excluding any of Tesla's businesses other than EVs, the firm expects the price to be $500 per share, four times the current price.

ARK Invest analyst Tasha Keeney has published an update on the firm's view of Tesla's share price in 2026. The forecast has been adjusted to reflect a 3-for-1 stock split that took effect on August 25, 2022. The new $500-per-share PT included only an assessment of growth potential in the automotive division and excluded all others. The adjusted price is four times the current price.

The information update provides additional context for the 2026 price target, which was $4,600 before the split and included an assessment of autonomous driving in its model. Released in April 2022, ARK’s model included updated assumptions for the entire self-driving car market at every price point, as well as the likelihood that Tesla will solve for fully autonomous driving. In the updated forecast, ARK excluded autonomous driving and any form of ride-hailing from the valuation framework, which accounted for more than 60% of Tesla's value over the next five years.

Removing autonomous driving & any form of ride-hail, which we believe will drive >60% of Tesla's value over the next 5 years, our 2026 price target would become roughly $500/share (post split) based on EVs alone, more than a 4X increase from current price.https://t.co/SWx3ZlQKHT

— Tasha Keeney (@TashaARK) January 6, 2023

While referring to Keeney's tweet, ARK Invest's Sam Korus said the company's superior drivetrain efficiency and low battery costs should make it one of the best positioned to weather any cyclical slowdown for automakers. “As it has been done in the past, it can be the first to lower prices, which puts pressure on other automakers,” he added.

On Friday, ARK’s Cathie Wood paid a lot of attention to the opportunities that are opening up for electric vehicles. She stressed that Tesla does not need autonomous driving to be successful. “The EV opportunity alone is enormous,” she added. Wood said Tesla's goal was to drive down prices and increase the adoption of electric vehicles. She talked about the fact that at the 2023 Investor Day, the company is going to introduce a new platform for a model that could cost close to $25,000.

ARK expects the EV market to grow from about 8.5 million in 2022 to about 60 million units, or about 75% of the market, over the next five years, Wood said—though that estimate could be conservative, she added. Wood also believes that Tesla is three to four years ahead of the competition in battery costs and is in a different league in developing chips and data for autonomous driving.

© 2023, Eva Fox | Tesmanian. All rights reserved.

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