Last year, ARK estimated that in 2024 Tesla’s share price would hit $7,000 per share, or $1,400 adjusted for its five for one stock split. Based on ARK‘s updated research, it now estimates that the price could approach $3,000 in 2025.
To arrive at this forecast, ARK used a Monte Carlo model with 34 inputs, the high and low forecasts incorporating 40,000 possible simulations. In the best case scenario, Tesla could reach $4,000 per share in 2025, and in the bear case, $1,500. The company forecasts Tesla’s unit sales to be between 5 million and 10 million vehicles in 2025, assuming increased capital efficiency.
Here are some key updates to Ark’s model:
- Ark pushed its forecast price target forward one year to 2025.
- Ark refined its estimates for Tesla’s capital efficiency.
- Ark added Tesla’s insurance business to its model.
- Ark added assumptions for a human-driven ride-hail service.
- Ark increased the probability of Tesla achieving fully autonomous driving within five years.
Except for Ark’s new sky-high price target, there are some bad news for Tesla, for example, the restriction from Chinese government. China has banned personnel from parking Teslas at military compounds, as well as the use of Tesla by people working at state agencies and sensitive industries, due to concerns that sensors and built-in cameras in Teslas could collect sensitive data about China.
Tesla stocks have surged more than 3% in the pre-market so far on Monday.
