Sure, but TSLA does not have that many doublings left, if you start from a small sum. No matter how bullish you are. I too have a smaller account, so I'm bullish on TSLA, but even at $4T market cap, I won't be able to retire on it. Womp womp.
Russ' $TSLA "Base", "Bear", "Best", and "Elon's 20M units" Share Price Predictions for 12/31/2030
I think
@Robocop makes an important point. $AAPL market cap is ~$2T today. If you assume that $TSLA continues to be the dominant force in a growing EV market profit-wise (like Apple over Android), with Solar/Battery/HVAC(?) compounded growth, Tesla Network becomes reality, high-profit margin Tesla App Store created, etc., then it is reasonable that $TSLA might have a $4T market cap by 12/31/2030. Here's why:
Its market cap today is $544B. That would be an average CAGR (Compound Annual Growth Rate) of "only" 22% per annum in the share price. I think Tesla's sales will easily grow at a CAGR of 22% or more for the next ten years. In the last 4 quarters, Tesla sold 430K vehicles. When I apply 22% CAGR to that, it will sell 3.14M vehicles in 2030. Compare that to 77.5M worldwide sales in 2019. It's only a 4% market share! This is my very conservative "base case" for 2030, $4,200 per share. I assign it only 40% probability because based upon history I don't see the incumbents or the newcomers threatening Tesla's EV dominance this decade.
Now, let's be very pessimistic and assume that $TSLA is in a +100% S&P 500 inclusion, FOMO, and short squeeze bubble right now. When you slice 1/2 off the market cap you get $272B. (A large 2021-22 macro decline could also happen if the economy stagnates in recession after covid-19, unlike Wall Street's current rosy outlook post-covid.) Starting down at $272B applying 22% CAGR we get a $1.98T market cap in 2030 (where $AAPL is today). Still not bad for HODLERs since it is a market-beating 13.8% CAGR from today's $574/share to $2,090. That is my "bear case" for 2030. I assign it 10% because $TSLA could be in a bubble, a worldwide recession or very slow economic recovery could happen post-Covid, or Volkswagen could surprise us in the EV market after throwing so much capital at it.
Personally, I am extremely bullish and this is my "best case".
Statista.com states Toyota had the leading global automotive market share of 10.24% in 2019. I'm going to give Tesla a 12% market share in 2030 for several reasons most of you already know so I won't discuss them here.
Automotive Analyst Daniel Harrison predicts 120M global automotive units will be sold in 2030. Based on his forecast, Tesla's share will be 14,400,000. That is a CAGR in units of 42% average per year. Applying 42% CAGR to the shares brings us to $19,133 at the end of 2030! I assign this prediction a 40% probability. [1]
Finally, Elon has stated his ambitious goal is to produce 20M units per year by 2030. That would be a 16.67% market share of the forecasted 120M global market in 2030. Units CAGR is 47%. Applying that to our shares takes them to $27,045 at the end of 2030! This number is an upper limit for EV's because obviously $TSLA cannot grow at 47% indefinitely or its sales would exceed the market. I assign this scenario a 10% probability (hope I'm wrong!) because Elon historically has been overly optimistic.
We should expect $TSLA share price CAGR to decrease after a decade because of the law of large numbers: "In a financial context, the
law of large numbers indicates that a
large entity which is growing rapidly cannot maintain that growth pace forever." - Investopedia.com
Now, like Ark Investments did, I'll combine my weighted probabilities predictions of the price on 12/31/2030:
10% * $ 2,090 [Bear] = $ 209
40% * $ 4,200 [Base] = $1,680
40% * $19,133 [Best] = $7,653
10% * $27,045 [Elon] = $2,704
I predict the 12/31/2030 share price will be $12,246 which is an average CAGR of 35.8%.
It would be an interesting exercise if others posted their 2030 "bear", "base", and "best" case scenarios (with their derivation) for 12/31/2030 by 1/1/2021 [2]. Then we can HOLDR and see who came closest a decade from now! If my $19,133 "best case" comes true I will buy ALL of you a gourmet lunch (who fly in on your private electric jets
) to attend the 2031 Tesla Annual Stockholders Meeting!
Russ
[1] I just did my personal math and it blows my mind because my family would be in the low nine figures if my "best case" happens... This is similar to what happened to long-term Berkshire Hathaway HOLDRS that bet on Warren Buffet since his early days. Perhaps Tesla will have to rent
Chase Center in SF for the Annual Shareholders Meetings!
[2] I plan to update mine after 12/21/20.
