Ron Baron said Tesla could make up to $1 trillion in revenue with just its electric car business. The legendary billionaire investor spoke about TSLA and its rising stock prices on CNBC’s Squawk Box recently, firmly restating that he will not be selling his shares of the company.
Tesla stock rose +19.89% on Monday, closing at $780. On Tuesday, TSLA stock showed signs of increasing even further. As of this writing, pre-market estimates for the stock stand at 12.05% or $875 per share.
Ron Baron believes the latest rally could be TSLA stock balancing itself because Tesla as a company has been growing. He mentioned that the ROI for the EV automaker in China would be incredible, recognizing Tesla’s potential in the largest car market in the world. Many TSLA bulls agree with Baron's assessment of Giga Shanghai and Tesla's potential gross margins in China.
Baron says this is just the beginning for Tesla, since now its stock is just catching up to its business growth. “It’s nowhere near ended at that point and time. There’s a lot of growth opportunities from that point going forward,” said the billionaire investor. Baron believes Tesla’s revenue could be $1 trillion in 10 years.
It is important to bear in mind that Baron’s $1 trillion revenue forecast for Tesla is only based on the company’s EV business. It does not include Tesla Energy, which stands to make the company more profit in the future.
The billionaire investor believes Tesla will start its path towards $1 trillion once it has figured out how to increase its battery production capacity. Once the EV maker figures out a way to increase its battery production, it will be able to manufacture even more vehicles and continue to grow in the global car industry.
Baron mentioned Tesla’s Battery Day, which may be scheduled for April this year. Elon Musk also talked a bit about Battery Day during the latest Earnings call. "Battery Day people. Wait until Battery Day. It's gonna blow your mind. It blows my mind, and I know it!” he said.
During the Q4 2019 Earnings Call, Musk also suggested that battery capacity would be one of the main focuses of the company moving forward. “The thing we’re going to be focused on is increasing the battery production capacity because that’s very fundamental. ‘Cause if you don’t improve battery production capacity, then you end up just shifting unit volume from one part to another, and you haven’t actually produced more electric vehicles.”
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