One of the most long-terms bulls of electric vehicle leader Tesla Inc TSLA recently doubled down on his projection for how much the company could be worth in the next eight to 10 years.
What Happened: In an appearance on CNBC, Baron Capital CEO Ron Baron highlighted the success of an investment in Tesla and what the future holds.
A large portion of assets held by Baron Capital are in Tesla, and that comes after Baron sold some of the position due to complaints that too much of the capital for two mutual funds was in the electric vehicle company. Baron Funds holds a position of around $6 billion in Tesla shares.
“It went up 20 times in the past two or three years,” Baron said of his Tesla investment.
Baron said he was confident in his Tesla investment, something he highlighted in a prior CNBC appearance.
“We invested $380 million between 2014 and 2016; the average price was around $40 a share.”
Since that time, Baron has made around $6 billion on the Tesla investment and has sold over $1 billion in Tesla shares.
Baron said it was hard to sell the stock, but he didn’t want people to think he lost his mind by committing too much capital to one individual stock.
Related Link: Why Ron Baron Expects To Own Tesla Stock For Another 10 Years At Least
What’s Next: Baron remains confident in Tesla.
“This is the very beginning of what they’re doing.”
Baron said everyone is focused on the most recent quarter, which also saw huge supply issues and the shutdown of the Shanghai facility.
“In three years, they’re gonna be doing 1 million cars a quarter.”
Baron said Tesla could produce 3 million cars per quarter in the future and many more down the road.
“I’m thinking about in eight or 10 years this is a 20-million-car company.”
Baron said he’s only selling Tesla shares if it represents too much of his fund portfolios and he is called on by investors to sell again.
The fund manager said he will make three times to five times the current investment in Tesla in the future.
Another Elon Musk-run company is also a large investment for Baron Funds. SpaceX is a large holding and another company Baron has high hopes for in the future.
“In the case of SpaceX, over the next 10 years, probably make 20x or 30x our money.”
Baron said it’s unlikely that SpaceX goes public anytime soon, but highlighted the potential for the satellite unit Starlink to go public in the next three years.
“That’s the business that is ultimately addressing a TAM [total addressable market] of $1 trillion, actually multitrillion dollars.”
Twitter Investment by Musk Meaningless? Baron was also asked about the news that Musk acquired a large stake in social media platform Twitter Inc TWTR.
Baron said the investment will not distract Musk from his duties at Tesla.
“I think it’s meaningless. It’s a tiny investment, $3 billion for a man who is worth $300 billion. He has Tesla, which is worth $1 trillion [and] on the way to being worth $3 or $4 trillion,” Baron said.
Musk’s stake in Tesla makes up just over 1% of his overall net worth, significantly less than his stakes in Tesla and SpaceX, the two companies that count him as their CEO.
“There’s no way this could mean anything meaningful to him.”
TSLA Price Action: Tesla shares were trading 2.38% higher at $1,010 Wednesday afternoon, according to Benzinga Pro.
Photo courtesy of Tesla.
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