Elon Musk believes that Tesla (TSLA) can reach a $4 trillion valuation if they “knock the ball out of the park” a few times.
The CEO has often commented on the potential market capitalization of Tesla. Most famously, he said that Tesla could be worth more than Apple and Saudi Aramco combined back in October 2022.
However, Tesla’s stock is down 4% since Musk made that comment last year. The NASDAQ is up 20% over the same period:
Lately, the stock has been frustrating Tesla investors, with a 17% drop over just the last month.
Recently, Ron Baron, hedge fund manager and longtime Tesla investor, went on MarketWatch to reiterate his vision that Tesla would become a $4 trillion company.
He believes that Tesla will achieve that by becoming a battery company:
In the case of Tesla, we are convinced that people cannot do what they’re doing and that, ultimately, it’s not just going to be a car company and it’s not just going to be a battery company. All the other car companies, which 50 years ago, elected to become much more profitable and outsource supplies and compute to other people. We’re going to be like Intel was inside of computers. This is going to be Tesla inside of cars. All the cars are going to be using Tesla autonomous driving. No one else can possibly compete.
Musk commented on the idea that Tesla could become a $4 trillion company – agreeing but adding that it would need to “knock the ball out of the park several times”:
We do need to knock the ball out of the park several times to achieve that value, but I think we can.
Tesla is currently valued at over $600 billion.
Electrek’s Take
Though $4 trillion sounds ridiculous (and it very well might be), most people said the same thing about Tesla being worth $100 billion, and it is worth $600 billion today.
Top comment by Chaos
This is the slippery slope. On what basis the market should value the Tesla at 4 trillion? In my opinion the the market has already factored in possible growth for next couple of years. The more it ballons the more chances that it may go bust. I am not even sure what signal Elon Musk is trying to send to the market? Is it to recover from the post Q3 performance results or something else?
As for knocking it out of the park, Tesla has certainly done it with the Model Y. The vehicle is as big of a success as it gets.
I assume that Musk means that Tesla will have to do that again with the next-generation vehicles and Full Self-Driving.
Those are big ifs.
What do you think? Let us know in the comment section below.
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