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Ron Baron thinks Tesla is worth $250 billion in 2025?


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Did anyone watch the interview with Ron Baron on cnbc?

I wasn't able to watch.

I hope the interviewer didn't just try and look nice for the camera and challenged him on what the number of cars, gross margin, etc he is assuming.

Just thinking out loud, Musk's goal is 500k cars in 2020, if we assume another double by 2025 that is 1 million cars. Musk has said operating margin will be around 15%, I believe.

If we assume the average car is about $50k (Musk said $35k for the model 3) so that is $50k x 1 million is $50 billion I believe (no calculator just typing quickly) and 15% operating margin is $7.5 billion. Subtract 35% for taxes and let's call it a round $5 billion. These are some huge assumptions as there is already skepticism about the 500k number by 2020, that assumes 50x earnings with a company with 15% operating margins.

This doesn't take into account dilution, which I'm assuming will be quite a bit to keep employees.


If we assign a 15 multiple then get to to a triple which sounds more realistic.


I think Musk is amazing but does anyone else think Ron Baron is crazy?



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I guess he assumes numbers more in this range



Still extremely optimistic. I guess he assumes several million cars a  year. If they really stay ahead of the curve and make it affordable with range, then I can see how sales could explode. I can see that if they figure out the tech and how to make it lower cost, they could stay ahead of those slow bureacracies for a decade or 2.

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I think it is a mistake to take estimates of cars sold in the future and putting some static margin on it.  There are three really interesting aspects to the Tesla story.


1) The brand.  I don't think enough can be said about this.

2) The massive infrastructure investments in the charging network and battery factory

3) Every single car coming off the production line has pre-installed autopilot capabilities and wireless internet


GM announces their latest golf cart, the Bolt, which has no capability to drive across the country.  It's going to be a joke in terms of how long it takes to actually hit the market.


I think Tesla will be the only company willing to make massive investments of cash flow into expanding their moat.  It's the only way to force change at the large automakers and push them away from compliance and fuel cell type products.  Similar in my mind to what Amazon has done to retailers.


If there was ever a company to speculate on, I think it's Tesla.  Too bad the price doesn't allow for a margin of safety or Elon Musk getting hit by a bus.

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By then Tesla won't sell just cars. They're already talking about this.




I have no idea what they market cap will be at any point of the future, but I know that anyone who just looks at numbers of cars produced is missing part of the story (and they might not stop at cars and storage, they might do other things... they're not exactly just following the traditional playbook so far).


Musk has already said he wants to do an electric pickup truck, similar to a Ford F150, but "better" with a dynamic suspension and gobs more torque than an ICE because electric motors just have superior characteristics on that front. He also said he had a design for a vertical landing and takeoff electric plane... Who knows what the company will do over time? Did anyone foresee them being where they are now when they had the Lotus-based $100k+ Roadster a few short years ago?


Personally I would expect them to start work on a second battery gigafactory sooner than most people expect and go big in storage, especially as solar panels fall below everything else in cost per kWh, also do the electric pickup (which would sell great in the US), and maybe a smaller 'Model 1' EV that would be more targetted to Europe and Asia.

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