Tesla bull Ron Baron expects to make 3x-5x on his investment in 10 years

Billionaire investor Ron Baron, whose fund has already made $6 billion on its original Tesla (NASDAQ:TSLA) investment, expects the shares will continue to skyrocket for the next ten years.

“I think we’re going to make three, four, five times our money on Tesla from here,” Baron said in a CNBC interview on Thursday.

Baron explained that he invested $380 million on Tesla between 2014 and 2016, at an average price of around $40/share, so his return is about 20x so far, or about $6 billion. Baron has sold about $1 billion worth of stock in the two mutual funds that own it to diversify the portfolio. Tesla now accounts for about 12.8% of his funds assets under management.

“I think for Tesla this is the very beginning of what they’re doing," Baron said.

He said he expects that Tesla, which announced on Monday that it delivered 310K vehicles in the quarter, will be able to deliver 1 millions cars a quarter in three years.

"I own a million quarter shares for our firm in the company," Baron added. "I have not sold a single share of that and I don't expect to, in my lifetime," Baron said.

Baron also said he expects that Starklink (STRLK), the Internet satellite service started by Tesla CEO and founder Elon Musk, will likely go public in the next three years.

Baron also believes that in the next 10 years his funds will probably make 20x-30x on SpaceX (SPACE). He doesn't expect that SpaceX will go public anytime soon.

Baron said that Musk's new over 9% stake in Twitter (NYSE:TWTR) is "meaningless" due to its size relative to Musk's net worth. Twitter stock jumped 27% on Monday following news of Musk becoming its top investor.

"I think it's meaningless," Baron told the business news channel. "It's a tiny investment, $3 billion, for a man who's worth $300 billion. He has Tesla, which is worth a trillion on the way to be worth $3 or $4 trillion. There's no way this could be anything meaningful to him, period."

Also see from Friday, Tesla Austin plant will be 'hearts and lungs of future US EV production:' Wedbush.

Comments

[LoveGotham]

Lots of people in the comments clearly missed the boat! Good news for you, it's not too late to invest

[Wikeman]

@LoveGotham At this price level and all the uncertainty it's too much risk taking. Better to wait for some fog to clear before investing based on business case and fixpoints.

[User 1377901]

@Wikeman then what do you when the next fog comes around and the next one after that?

[Concernedabout]

Ron’s just hyping up the stock, hoping for more retail bagholders to pump the price further!

[22thoroughbred]

@Concernedabout so far very unsuccessfully.

[WillLong]

@22thoroughbred
"so far very unsuccessfully."
He is up 6b.

[Seeking Bravo]

Stock return is a function of the price paid. Buy tesla at $40, he's a genius. Buy Tesla at $1200, and hoping it'll still go 5x, good luck.

[BLIN8089]

@Seeking Bravo those who bought at $40/share sold to those who bought at $1,200 with a big dose of hopium.

[EV_supporter]

@BLIN8089

I bought at below 6, then bought more on it's way up, still looking for opportunities to buy more. In 10 years when we look back, people will realize how cheap it was at $980.

[solucky]

@EV_supporter

"
In 10 years when we look back, people will realize how cheap it was at $980. "

Sure if you get 10$ / EUR in 10 years possible

[Jonatthan]

With all of these shortages and price increases you really think this is possible ?

[Montresor]

@Jonatthan Doubtful. They are facing numerous severe headwinds.

[Trapping Value]

"Should have sold at $1,200." Ron Hobo in 2026.

[Robert NYC]

Great! See you in 5 years AFTER the recession.

[marketdontlie]

Another clown hoping against hope that the Greater Fool theory continues to play out with TSLA, the biggest bubble in the equity markets, so that the bubble inflates as large as possible before he ultimately cashes out. And he's even brazen enough to tell you. Lo and behold your 2022 stock market bubble, ladies and gents.

[Eric & Bill]

@marketdontlie how long have you predicted this to happen?

[Montresor]

@marketdontlie I have to hand it to Baron. Thought he was crazy a couple of years ago and here we are. However, his luck is likely to run out over the next 12 months. All the positive catalysts are priced in and more.

[22thoroughbred]

I remember my first brokerage job was at Schwab in 1988, Schwab was Barons largest holding like 2.5-3m shares, I’ll bet he still holds it. If he does and bought in 1988 his avg cost is 0.16, yes 16 cents

[StevedoreD]

@22thoroughbred he still holds Schwab.

[EV_supporter]

@22thoroughbred

Ron is a long term investor and he knows what he is doing.

[22thoroughbred]

@EV_supporter I don't see anywhere that I say otherwise

[thebenm]

If Apple had never split it would be like $28,000+ a share or something.

No reason Tesla won't match or surpass that.

Apple merely changed the world.

Tesla is saving it.

Smart folks get it.

Other folks watch Hee Haw.

[Guraaf]

@thebenm Right. No reason Tesla wouldn't reach $500,000 actually just like Berkshire Hathaway.

[Market freedom]

@thebenm where does the energy to make electricity to power electric cars for the masses come from?

[thebenm]

@Guraaf Well $500,000 is going some but $28,000 a share is reasonable.

[deercreekvols]

Ron Baron, noted Tesla bull, likes Tesla.

Warren Buffett, when asked if he would ever invest in Tesla, said:

"No."

To believe that Tesla is the only stock to invest in to make a profit is laughable. Mr. Buffett, a disciple of Benjamin Graham, knows that to invest in a company one needs to trust the leadership of that company.

Elon Musk tweeting a poll about dropping the w from Twitter raises questions.

[Reidar Herreid]

@deercreekvols Warren Buffett is not infallible. I remember listening to him back in 2013 saying that Apple was too risky and no one should buy the company. Now it’s his biggest position.

[LoveGotham]

@deercreekvols Warren was wrong about most of the recent unicorns... Amazon, Google, Microsoft... and he has been completely wrong about Tesla. You can't expect a 90 year old to understand cutting edge technology. To be fair, most people got Tesla wrong too.

[pyrite99]

@deercreekvols I suggest dropping the i and replacing with an "a". TWTR is just more social media, time wasting garbage.

[rkw29]

Greater than Apple and Microsoft combined which are also overvalued. Uhh huh. Tesla is an auto manufacturer. Everything else is noise. Prove me wrong. Break down their revenue for me and show me what percentage is energy or “other” despite the promises for years that it would be a huge portion of their total revenue.

[Legacy Legends, LLC]

@rkw29

"Break down their revenue for me"

You need someone to do your homework for you?

[rkw29]

@Legacy Legends, LLC
Well prove me wrong? Can you? Prove to me Tesla is more than an auto manufacturer. Honda has a greater percentage of energy and other revenue not from automotive. Are they considered a “tech” company or is Honda considered an auto manufacturer?

[Baslim]

@rkw29 Tesla is a BEV manufacturer making 30% gross margins on its vehicles. Are there any other auto manufacturers doing that on their BEV vehicles? Do the other manufacturers own their own servicing network? Do the other manufacrurers have a plan to buy and build battery cells to grow its BEV business at 50%-100% annually beyond the conabolization of their ICE business? Do the other companies have over the air updates, integrated elecyronics, cast rear and front body parts? Do any other car manufacturers have vehicles that are able to charge customers for the fuel savings that they provide? Has any other car manufacturer said that their vehicle has the necessary hardware in all of their vehicles for city autonomous driving. Does any other vehicle makers have 10K+ drivers using autonomous driving in non geo fenced areas that is statistically safer than without using the software. Does any other auto manufacturer or it C suite have businesses outside auto manufacturing that has made large ROIC? Any that have done so in really difficult industries?
Do any other auto manufacturers have material reasons they should be favored over Tesla on a price to 2025 revenue basis?

I would like to here any yes answers. BYD, other Chinese manufacturers and a few new vehicle manufacturers have a few. Except BYD most have higher peice to sale ratios than Tesla.

[Mark Krieger]

the Tesla Baron strikes again.

pump and dump?

[bfyrth]

@Mark Krieger he knows the writing is on the wall with Shanghai

[Mark Krieger]

I was short the shares.. A couple of years ago, TD Ameritrade fortunately forced me to close the position (even though I was even close to a margin call)

If not, I would have been wiped out.

[Kamil Kolacek]

@Mark Krieger Refreshing to have someone humbly admit their mistakes on this website, respect to you for that.

[EV_supporter]

@Mark Krieger

Yes you were very fortunate for the margin call. On the other hand, do you ever regret for not doing enough research and missing the boat? Shorting might make a double. Going long could give you 1000x. Very few bears understand this. TSLA went up 300x, I think another 20x is coming.

Just my view, not advice.

[NJ Trader]

@EV_supporter 20x, so a $20+ trillion market cap? 😂

[Nat Stewart]

Musk the first Trillionare? Wild.

[Cathy Wood]

3-5x?
I made nearly 10x in my oxy investment.

[Seeking more alpha than you]

@Cathy Wood the difference is his 3-5x comes after he has already made 20x for a whopping 60-100x.

[bfyrth]

@Seeking more alpha than you he's about to go to 0x

[EV_supporter]

@Cathy Wood

TSLA 2010~2030 should be 4000x

[tmt83]

This company is like 3 advanced companies in 1 (EV, Energy, AI) Tesla 5-10X in 10years is easy IMO.

[solucky]

@tmt83

" This company is like 3 advanced companies in 1 "

And in all 3 average or massive behind today....

Solar a simple bailout of Elon and Family and not a reeal business so far

Storage paid by programs like SGIP . You get 300 taxmoney for an 100$ product.

BEV collecting arround 5000 $ / ton CO2 reduced massive waste of taxmoney

[Wikeman]

Luckily for the rest of us, Ron Baron will be unloading his position despite this firm belief. Purely for philanthropic reasons of course.

[EV_supporter]

@Wikeman

Seems to me you don't know Baron well.

[Wikeman]

@EV_supporter He did sell out some of his position, and I don't think he'll wait for it to triple in value before he sells the rest. No doubt he's very clever though.

[EV_supporter]

@Wikeman

Although Ron didn't do so great on TSLA investment, he is the first fund manager who kind of understands how to find the next 20 bagger.

Ron Baron searches for stocks that can give him 10x, 20x, 50x in the next 10 years. His fund didn't buy enough TSLA and didn't get in early enough (only 1.5% of his fund went into TSLA at $40). However, he knows he has hit the jackpot. He is likely to hold significant amount shares for a long time. He said he will never sell his personal TSLA holdings in the rest of his life, which is at $1.2B currently. His personal TSLA holding is likely to turn into $20B within the next 12 years.

If TSLA hits $3k within a year, his fund would sell some, people paid him to manage money, not to just hold TSLA.

[xinyi5]

Baron is right on all counts BUT one. TWTR is absolutely a big deal. TSLA now has CONTROL over the internet town hall. It has a say in how content is policed and what content gets pushed to the world. That is a very big deal!

[Jstic]

@xinyi5 Buying 10% of Twitter is "CONTROL over the internet town hall"?
He has one board seat, duh.

[EV_supporter]

@Jstic

Did you notice how he removed Michael Burry's check mark and joking about adding it back?

This is not a regular board seat.

[TastyLaksa]

@EV_supporter if true you think thats good for twitter? letting elon do his damage?

[Ramon_13]

Tesla is on the way to $3 or $4 trillion. I fully agree Ron !

[EV_supporter]

@Ramon_13

It will hit $4T on it's way up and pass it.

[sr1952]

Breaking news: Ron Baron is pumping his Tesla stock.
Next up: Cathie Wood pumps her Tesla stock.
Later: Dan Ives says whatever happened today is good news for Tesla.

[User 51694961]

@sr1952

Instead of blindly attacking, how about telling us specifically how Ron and Cathie and Dan are wrong.
It's people like them (and me) who have been correct about Tesla, the Tesla-bashers wrong.

[BAHAMAS1]

@sr1952
Another jealous non TSLA stock owner.

P.S. you still have time to invest.

[bfyrth]

@RealityMage sure, here goes, massive recession inbound, Shanghai factory remains shutdown and looks like it will continue, TSLA is super over-stretched at current valuation, FED removing liquidity out of market, how's that