ARK Investment Management has updated its open-source model for Tesla, projecting an expected value of $2,600 per share by 2029.
The forecast includes bull and bear cases, with potential share prices of approximately $3,100 and $2,000, respectively. These estimates are derived from Monte Carlo simulations that account for 45 independent inputs to predict various outcomes for Tesla’s performance and stock value.
According to ARK, nearly 90% of Tesla’s enterprise value and earnings in 2029 will be attributed to its robotaxi business, with electric vehicles comprising about a quarter of total sales and roughly 10% of earnings. The robotaxi business is expected to have significantly higher margins.
In the bear scenario, Tesla is projected to sell 5.8 million cars, generate $250 billion in electric vehicle revenue, and $603 billion in autonomous ride-hail revenue. The total gross margin is expected to be 56%, with a total EBITDA margin of 32%. This scenario estimates a market cap of $7,000 billion and a share price of $2,000.
As for the bull scenario, Tesla is expected to sell 14.4 million cars, generate $394 billion in electric vehicle revenue, and $951 billion in autonomous revenue. Total gross margin is expected to be 53%, with a total EBITDA margin of 32%. The bull scenario estimates a market cap of a whopping $10,900 billion and a share price of $3,100.
If you take a look at the Autonomous Miles Run Rate chart, it’s clear Tesla has a massive lead compared to other robotaxi companies. Tesla’s customer fleet is collecting Autopilot and Full Self-Driving (FSD) data far faster than anyone else. Can others even catch up?
Key updates to ARK’s model include expectations that Tesla will launch a robotaxi service within the next two years, significantly contributing to its revenue. The model assumes Tesla will initially own and operate its vehicle network, retaining most of the revenue per mile. Tesla’s vehicle production is projected to increase by 45% annually through 2029, scaling from 1.8 million units per year to between 6 and 16 million units.
Additional opportunities such as Tesla’s stationary energy storage and humanoid robot, Optimus, are included in the model, though these are not key drivers of the 2029 price estimates. The Tesla Semi, expected to be commercialized in 2026, is not expected to significantly contribute to Tesla’s value within the five-year horizon.
The Supercharging Network, while essential for electric vehicles, is not expected to generate significant revenue. FSD licensing agreements with other automakers could be significant but are unlikely to impact revenue substantially in the next five years. Plans to offer distributed AI inference-as-a-service are likely beyond the five-year investment horizon.
The forecast relies on data that are subject to various assumptions and risks. Unexpected events such as leadership changes or natural disasters could significantly impact the outcomes.
Back in April 2023, ARK Invest predicted Tesla’s share prices would hit up to $2,000 in 2027, with $2,500 and $1,400 per share in bull and bear cases. But things have changed now that Tesla’s FSD (Supervised) v12 has moved to a new AI video training model.
ARK says its detailed simulation model is available on GitHub for further exploration and testing.
