Tesla’s price per share could surge to as high as $2,600 by 2029, ARK Investment Management said Wednesday.
Citing data from their updated open-source model, Ark said this projection reflects the expected value, with the bull case suggesting a potential price of $3,100 and the bear case estimating $2,000 per share.
One of the primary drivers behind this forecast is the expected launch of Tesla (NASDAQ:TSLA)'s robotaxi service, which, per ARK’s estimates, could account for nearly 90% of Tesla’s enterprise value and earnings by 2029.
“Meanwhile, electric vehicles could approximate a quarter of total sales and ~10% of Tesla’s earnings potential, as we believe the robotaxi business will have much higher margins,” ARK wrote in its report.
"We believe that Tesla will launch a robotaxi service within the next two years," it added.
Remarkably, if the robotaxi opportunity is removed from the model, the price target for Tesla drops significantly to around $350 per share, ARK highlighted.
The asset manager’s model also incorporates updated assumptions regarding Tesla's autonomous driving technology and manufacturing growth rate. ARK expects vehicle production to increase by 45% per year through the end of 2029, scaling from 1.8 million units per year today to between 6 and 16 million units per year.
Other potential growth areas for Tesla include stationary energy storage, which ARK predicts will outpace vehicle growth, and the Optimus humanoid robot project, which could significantly reduce manufacturing costs. However, these factors are not the primary drivers of the price estimate, ARK noted.