The analysts of ARK Invest, the investment management company, created by Catherine Wood in 2014, they are convinced: the stock of Tesla, Elon Musk’s electric vehicle giant, will rise to $2,600 by 2029, thanks to robo-taxis. A target price that implies an upside potential of 1,350% compared to current values (around $170).
Title can go up to $3,100
In a note released yesterday, ARK experts suggested that a bullish estimate (25% probability of realization) would place the stock at $3,100 per share. A bearish estimate instead places the stock at $2,000 per share, again with a 25% probability of occurring.
Born as an electric vehicle manufacturer, Tesla is trying to establish itself more as a technology company than a car manufacturer. For this reason, ARK argues that only a quarter of Tesla’s sales and about 10% of its earnings potential in 2029 will come from the electric vehicle sector. 90% of the value will come from its robotaxi business.
It must be said that Tesla has not yet launched a robo-taxi business. But ARK says the launch is guaranteed soon.
“We believe that Tesla will launch a robo-taxi service within the next two years and that the likelihood of Tesla failing to launch a robo-taxi service within five years is minimal,” the analysts explained, noting that Tesla has stated that will unveil its prototype during an event on August 8th.
Without robo-taxi, much smaller bounce
What if Tesla fails to expand its robo-taxi network in time, due to difficulties obtaining regulatory approval or some other reason? In that case the chances of an increase would be decidedly more limited.
ARK experts say that if Tesla’s robotaxi network is not operational by 2029, the price target will be around $350. In this case, it is not excluded that Tesla could launch a road transport service, similar to Uber and Lyft.
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