Tesla’s worth may exceed $4 trillion by 2030, says analyst
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Market value is one of the most important concepts for investors as it provides a concrete method that eliminates ambiguity or uncertainty for determining what an asset is worth.
Companies work hard to increase their market values to become prominent in their respective sectors.
We all know that Tesla is one of the leading companies in electric vehicles as the company’s market value exceeded $1 trillion in October 2021, before falling back to $900 million.
Now an analyst has calculated that Tesla’s market capitalization could exceed $4 trillion by the year 2030.
Gary Black, an analyst from The Future Fund, says that the electric vehicle industry will reach a market penetration of 60 percent by 2030 and anticipated that Tesla will achieve 21 percent of the auto market share.
When EV adoption hits 60%, $TSLA with 20% EV share will be viewed a safe haven like $AAPL.
— Gary Black (@garyblack00) March 4, 2022
1/TSLA vols will be 10M (SAAR 85M x 60%x 20%) EPS ~$100/sh; Adj NI $140B.
2/At P/E of 30x (future growth @ 60% EV adoption +15% CGR), so market cap $4T.
3/Demand largely replacement.
Black believes that Tesla will quadruple its current value to reach as high as $4 trillion by 2030. According to this estimate, with global light-vehicle sales at 85 million units, Tesla would be delivering about 10 million vehicles a year by the end of the decade.
Black predicts that Tesla’s current fleet’s existing sales will make the company $140 billion, increasing Tesla shares to $100.
Another Tesla investor, Cathie Wood of Ark Investment also predicted that Tesla stocks will reach $3,000 by 2025 and the company will reach a $4 trillion market capitalization, in a research note. She holds a bear case price target of $1,500 per share and a bull case price of $4,000 per share by 2025.
In another recent note, Wedbush analyst Daniel Ives noted Tesla’s newly launched Gigafactory in Germany as an important milestone for the company that should lead to the production of another half a million vehicles per year.
“We continue to believe that Tesla’s stock has been way oversold over the past few months along with the risk-off mentality among tech investors, however, the Street over the past week has started to better appreciate what the seminal launch of Giga Berlin means for the Tesla supply story in 2022 and beyond,” Wedbush’s Ives wrote in a note to clients.
With the opening of the Gigafactory in Germany, Tesla can significantly increase production for Europe while lowering previous costs of importing vehicles from its Gigafactory in Shanghai.
Tesla is also set to start delivering vehicles from its Texas Gigafactory Texas this month.
Tesla’s success will also make the CEO of the company, Elon Musk, the world’s first trillionaire in 2024 according to an estimation by Tipalti Approve.
What about the competition
Competition high market value in tech companies is fierce. There are many well-known companies that have market values exceeding $1 trillion in the U.S.
Apple became the first company to achieve a $1 trillion market value in history in 2018. The tech giant was later joined by Amazon and Microsoft, in 2018 and in 2019 respectively, to reach a market value of $1 trillion.
Later in 2021 Apple and Microsoft have reached a market value of $2 trillion.
The king of market share is still Apple by a large margin with the company reaching $3 trillion of market share in January this year.
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