Ark Invest JUST Released NEW Tesla Predictions!! [Full Details]

oh my gosh kathy wood and arkan vest

just released their new tesla

bull thesis i have not looked at it yet

i'm so excited we're gonna go break it

down

right now we've been waiting for this

for probably about six to eight weeks

now it's always been coming like oh it's

coming in one to two weeks for like the

last eight weeks

anyway it's here haven't looked at it

yet super excited uh really hyper about

this and it's like 10 o'clock at night

but anyway we got to do this this is

great

really quick let's start with what wall

street is projecting okay so wall street

is projecting

that by 2030 tesla will do a

somewhere around just under 400 billion

dollars of revenue by 2030 okay so wall

street is at

400 billion dollars which if you use a

70 times earnings multiplier and some of

the math that i did i broke this down in

another video

you get to a price of about seventeen

hundred dollars that's twenty thirty

seventeen hundred dollars if you use

tesla's gigawatt calculations and you

use some reasonable estimates with that

you get to around double that 700

billion dollars

now my base case is around 750 billion

dollars

which puts the price somewhere around 3

200 in 2030

and a bull case of having this share

price be around 6

000 in 2030 okay that's what we've

covered before but folks

now we're going to get into what ark

invest just said and

oh oh man uh i'm oh my gosh i'm just

taking my first glance at this here and

it's gonna be juicy folks it's gonna be

juicy so buckle up

let's get the apple pencil let's get

right into it here we go oh

snap arc invest price target for tesla

2025

five years before what i'm using okay

they're projecting to 2025 and remember

i was projecting

14 million cars maybe they'll do 12

million cars

as a worst case scenario was my

projection for 2030 okay

keep that in mind as well we've got a

2025 here here we go

uh last year eric estimated that in 2024

tesla share price would hit seven

thousand dollars per share or 1400

adjusted for the split uh in 2024

based on our updated research we now

estimate that it could approach

more than double that what three

thousand dollars in 2025

whoa that is my base case scenario well

my base case scenario is 3 500

by 2025 and over six thousand dollars by

2030

they're thinking they can get to my base

case or almost my base case

in uh five faster years or five fewer

years that's crazy how are they coming

up with these numbers

to arrive at this forecast arc used a

monte carlo model okay so this is where

you just put a bunch of data in and it

spits out this really weird looking

graph with a bunch of projections

it's just google it go to google images

type in monte carlo and you'll see it

uh high and low forecast incorporating

40 000 simulations

whatever okay so they put it into their

machine fine okay scenarios

expected value three thousand dollars

this projection is our base case

whoa that's not even their bull case

three thousand dollars

so their base case uh is

roughly my base case five years later

and i like to be

extremely conservative with my

fundamental analyses

this is why i get pissed and i did a

video titled i'm pissed about tesla's

valuation

because people are ragging on me like

kevin you're you're too bullish you're

too bullish i'm like man

i didn't even include all the possible

revenue because i do that as a way to be

conservative

they're thinking we could get to my base

case scenario five years earlier

remember my bull case 6k 3500 for my

base case they're basically at 3 000

uh at in 2025 this is incredible uh they

are at a

bull case of four thousand dollars

exceeding

uh my base case in 2030 they have a bowl

case of 4

000 in 2025 we believe that there is a

25

probability that tesla could be worth

four thousand dollars per share or more

in 2025 25 probability that tesla could

be worth fifteen hundred dollars per

share or less in 2025.

by the way twenty like fifteen hundred

dollars

if we go to the wall street scenario we

get uh

fifteen hundred dollars approximately in

twenty thirty

they think like worst case twenty-five

percent chance

or fifteen hundred dollars or less you

know probably not much less but a little

bit less

in uh in 2025. this is crazy this is all

five years earlier this is amazing okay

let's look at the numbers here

so uh cars sold so this is now the 500k

uh example bear case five million cars

10

million cars in their bull case for 2025

how how are you going to achieve 10

million cars in 2025 i mean maybe

but i'm just i'm going to pull up my

tesla ramp here

this is this is my tesla ramp chart

right here

and i by 2025 i'm at six million cars

and that's including two new factories

after giga berlin

austin fremont shanghai all get to full

capacity at a million each

holy smokes i mean i get to i get to

maybe six mil

cars uh which which kind of aligns over

here with that's their bear case

basically oh my gosh

okay average selling price okay so i use

42 000

as my average selling price they but i

also include full self driving in my

average selling price

so i kind of lump that together so i use

42 000 they're using a 2025

bear a 45k oh my gosh

and a bull case uh

their bull case of 10 million cars only

uses 36 mil or

36 thousand dollars per car okay

interesting so higher in their bear case

but lower in their bowl case

i got it electric vehicle revenue uh 367

billion

what oh my gosh okay okay okay okay here

we go so in their bear case they're

basically giving

zero dollars of revenue to autonomy

uh and they're giving in their bowl case

327

million dollars in value to autonomy

i mean my sales in my bull case

uh for 2030 my sales

and this would be everything related to

the cars is uh around

672 billion dollars so my 2030.

so uh let's put this kevin 2030

bull is 672

billion by 2030 okay if their bull case

is 20 25 and they're basically saying

uh if we add these together that's about

the same number that's pretty dang close

that's 690-ish billion dollars five

years earlier that's

ambitious they really think this uh that

that self-driving the autonomy network

is gonna be

really really valuable and they're

really low actually on insurance

and i guess it makes sense if you're

going to put all your revenue into

autonomy uh you you would not do that my

base case scenario for insurance has

way more revenue wow they're actually

they're not excited about insurance now

this is also a company by the way that

does not like lemonade insurance

so they are not excited about insurance

clearly here

human driver ride hail revenue so they

almost think that it's possible that

humans could be doing the ride hailing

maybe the car drives

automatedly but somebody has to sit

there and it's not going to be as

profitable that way

this is this is insane i'm going to

highlight like the the insane portion

here

let's go let's pick a red color here and

we'll just put uh this red circle right

here around this 327 that is a big big

big big number but even their bear case

scenario is very very high

what in their bare case scenario they're

using a

40 gross margin excluding credits

for the car no freaking way elon's

vision was getting the 30 percent in uh

in the future like long run 30 they're

saying 40

okay all right interesting uh

okay all right i mean uh maybe they're

really valuing that full self-driving

high but wow

total gross margin 43 50 over here well

over here again they're using the

autonomous so it makes sense that the

margin would be higher here

averaged out even to margin that's very

very high

30 to 31 wow this is this is incredible

uh okay then we've got a potential

market cap so market cap comparison

market cap arc invest thinks tesla's

going to have a market cap of between

1.5 trillion dollars to 4

trillion dollars in 2025.

kevin's bull case scenario oh my gosh

has them at ok ok so my bowl case

scenario

has them in 2030 at a 6.8

trillion dollar market cap and my base

case scenario

puts them at a market cap well let's do

the quick math here really quick

so we're going to put a formula in here

shares outstanding 1.1

times the share price in the future

there we go

uh so that puts them at about 1.12

it's kind of my base case scenario for

uh

for tesla in 2030 jeez

i mean that that's incredible oh my gosh

so my bold case scenario

is about seven billion dollars in uh in

2030

that's my bull and kind of like hey my

in my opinion my kind of like worst case

bear case almost

i call it my base i just i'm really just

doing bass and bull here's what i'm

doing

they're doing uh baron bull fine uh so

we've got

uh for me i've got a bowl of almost

seven trillion dollars in 2030

with a base of 1.1 in 2030

they are they're really really excited

here

uh at least 1.5 billion dollars and

2025 and four billion or sorry for

1.5 trillion dollars in 2025 and four

trillion dollars

over in uh in their bold case scenario

uh absolutely incredible let's see what

else we have here okay

so uh let's see capital efficiency let's

keep going a little bit here percentage

of all tesla's

on the autonomous platform so they're

thinking that worst case scenario nobody

really adopts the ride hailing that's

how they're using the estimate here

but they really think in their bulk case

scenario up to 60 percent of users

are going to be adopting this autonomous

driving scenario

or the ride-hailing scenario entering

their vehicles into

uh ride sharing very interesting we

pushed our forecast

forward one year to 2025 we refined our

estimates for capital efficiency we

added insurance to the business model

barely though

they're not excited about that insurance

for sure

uh okay we have increased our

assumptions for tesla's capital

efficiency

previously we estimated that tesla would

spend eleven thousand to six hundred

thousand dollars per incremental unit of

capacity in 2024.

in 2019 uh tesla spent 1.3 billion on

capital expenditures and produced

500 9 000 vehicles an increase of 144

000 vehicles from the previous year

right suggesting that capex per

incremental vehicle was roughly

uh nine thousand two hundred dollars

okay got it so

actually way lower than their

expectations here uh

they're they're thinking maybe on chart

for about ten thousand three hundred and

thirty dollars

in uh with a sixty percent increase in

vehicle production

okay probably overstates their thinking

all right let's get to a little bit more

info here

so arc estimates that tesla could

achieve better than average margins on

insurance thanks to highly detailed

driving data absolutely completely agree

but they're not really excited about how

much money it's going to make right now

we know it's only available in

california

uh okay because its vehicles have better

than average

safety profiles tesla should be able to

use real-time data to offer insurance

in its vehicles pricing it dramatically

lower basically

pricing it dynamically rather lowering

customer acquisition costs

increasing margins gotcha okay if

they were to sell to 40 of vehicles

with their own insurance tesla's

insurance revenues could approach 23

billion dollars annually in our bear

case

in our bull case tesla's insurance

revenues

uh let's see will be incorporated into a

platform fee

ah okay okay okay so that

that explains why this insurance number

was so low

because i'm like wait a minute why is

this insurance number so low in their

bull case

basically they're thinking the insurance

is something that's going to be

part of this 127 billion dollars

that makes me feel a lot better because

i broke out the insurance and i'm like

whoa whoa whoa whoa whoa that is pretty

freaking low so that makes sense

human-driven ride hailing ark's bear

case now includes tesla's opportunity to

launch

human-driven ride-hailing service uh and

and this is their bear case right

oops that's supposed to be the

highlighter here there we go uh

previously arc detailed that a human

driven riot hailing service would have a

lower cost structure than of incumbent

companies

laying the foundation for a fully

autonomous ride-hailing network

in our bear case ride hailing could add

an additional 20 bill to operating

profits by 2025

increasing our price target about 20 uh

about 500 so they're putting about

500 of weight on ride hailing

with human involvement uh they think

human involvement at first

and uh basically as sort of a fail-safe

of the uh limiting the downside of a

failed autonomous

service right if people don't uh take up

the autonomous service like there's no

guarantee that humans are gonna be

comfortable with this right

uh so okay then in our latest valuation

model ark assumed that tesla 30

only 30 chance of delivering fully

autonomous driving in five years ah okay

okay in five years

now arc estimates that the probability

is 50

so they think there's a 50 chance by

2025

that we will have full self-driving and

full self-driving ride hailing

arc estimates that tesla's vehicle fleet

gives it access to

20 to i'm sorry 30 to 40 million miles

of data per day

up from 20 million per day last year if

successful tesla could scale its robo

taxi

service rapidly allocating the

additional cash in turn to manufacturing

capacity

serving its autonomous network oh my

gosh they're basically saying

they're going to get so rich off the

robo taxi network and their bull case

scenario

that they're going to have so much extra

freaking cash that they're going to be

able to scale more factories

that's how they're getting to these

crazy numbers uh so

quickly because i'm like where is the

money i'm thinking myself

like for my scenarios like where is the

money going to come from

to make all the factories that you would

need in your bowl case scenario here

kathy the bull case scenario

is 10 million cars sold in 2025.

i'm at 14 mil in 20 30.

i'm at six mil in 2025 where's that

money coming from to produce these extra

factories

it's built into their autonomous

ride-hailing uh bull thesis here

tesla could generate an additional 160

billion in ebitda by 2025

in our book case scenario ride hill

would account for the majority of

tesla's enterprise value whoa

basically they're look i mean they are

so bullish on uh this uh

the the ride hailing that they basically

think this could be

this is like this is the real profit

center for this company here

it's not selling cars it's ride-hailing

they're very very bullish in this

remember i incorporated ride-hailing and

autonomous and all that all those

potentials just into the cost of the car

and the reason i did that is look if the

average cost of the car because they

introduced maybe a 20 25 000

vehicle if in 2030 the average cost of

the car is

including full self driving 20 30 uh

somewhere around 42 000 including the

self driving

and there's maybe a you know small

commission to use your car and ride

hailing but it's your car

uh you know you're making the profit

from this minus a small fee or whatever

a service fee for

for tesla uh you know that's that's how

i came up with my 42

roughly my 42 000 in revenue per car

they are much much more bullish here

so note that autonomous driving uh

pushes the distribution of our expected

price targets up significantly as shown

below yeah you don't freaking say

uh the first chart represents the

likelihood uh just

a likely distribution of possible price

targets in our monte carlo analysis

while the second chart shows scenarios

okay got it so their base case here

fifteen hundred dollars expected value

three thousand dollars but they have a

bull case scenario here of four thousand

dollars

uh and they really think there's a small

chance oh my gosh

look at this i mean they're roughly

estimating here that there's maybe even

this five percent chance

of tesla literally just going to the

moon and uh and having this the share

price of potentially eight thirteen

eighteen twenty three thousand dollars a

very very bullish

scenario mixed within price targets as

shown above

okay these these are the odds right

tesla delivers robo taxi

uh this is this is really where they

think the money is right here in the

robo tax scene

uh and they've got this scenario over

here this green one

that's tesla produces more than four

million vehicles but does not meaningful

meaningfully sell into vertically

integrated ride hailing

and that's what i think so i'm a little

bit more of this green here that this is

like

you know robo taxi is going to be a

thing but it's going to be more of a

a profit for the person who bought the

car not necessarily for the company

now we'll see and it's oh look these are

all of this just makes me more bullish

right i'm not going to revise my

estimates right now i'm going to digest

this a little bit more

but this just makes me more bullish i

mean i bought more tesla today in the

dip

uh if you watched me live you you saw me

buy another like

86 thousand dollars like i put my money

where my mouth is tesla goes down

and i say buy the dip what do i do folks

what do i do come on

we got a shirt okay to the freaking moon

we got the rocket ship and on the back

of this shirt

which you could get at metkevin.com

merch it says buy the dip

okay in many of our low end case uh

cases we model production constraints

limit tesla to fewer than four million

vehicles produced per year exactly

that was my concern is that like without

this crazy

inflow of cash which they're thinking is

going to come from autonomy

it's going to be slower to ramp to get

to all of these vehicles produced

well uh let's switch to angles here

there we go while technological and

logistical bottlenecks prevent the

launch of both human

driven and autonomous ride-hailing

networks oh okay maybe at the same time

as shown in okay as shown in gray got it

that's the last scenario

production when production is not

constrained a human driver ride hill

network increases the expected price

target range

okay all right got it so they're still

giving a boost here even if we have

human-driven vehicles in ark's tesla

price target

please note that electric vehicle and

robo-taxi business lines generate

roughly 40 and 50

of a tesla's expected market cap

presumably here respectively is what

they're saying

the average values uh from our monte

carlo simulation respectively yep

respectively

in 2025 bingo exactly so the

the way they're getting to this really

really bullish thesis here

is they're putting in their bull thesis

way more money on this robo taxi taking

over

and in their base case scenario they're

kind of in line with me in production

uh in production i was thinking maybe

six mil by 2025

without this big push in robo taxi

they're thinking five mil

so they're actually a little bit lower

than me on that uh but

their price target uh actually exceeds

mine

so uh and that's because they think

margin is going to be actually way

higher than i'm even estimating it at

they are very very bullish on the tesla

margin conclusion

given our updated outlaw updates

outlined in this blog arcs price target

for

uh 2025 is three thousand dollars my

gosh my base case scenario is three

thousand dollars

five years after this and again maybe

i'm too conservative like some people

look i got a lot of hate for for my

price targets but i'm like

look hate on me all you want i think i

don't think i'm gambling like i think

i'm being conservative

listening to arc here now i

i feel like i sound even more

conservative like wow

wow but anyway uh arc

by the way if you want to chat about

this and you want to join me in my

private live streams remember to take

advantage of that coupon code

that does expire very soon as we're

waiting for those stimulus checks to

come in

use that thirty eight percent off coupon

code uh similar sex i'm expecting to

probably end this uh

either this weekend or monday we'll see

where we wanna end this

uh mostly because there are people still

emailing me asking to get into the

programs with their stimulus funds

uh and i can't wait to see you in the

private livestreams that i hold every

single day

that the market is open and you get all

my buy sell alerts as well so check that

out link down below

let's keep going here we published our

model on github okay cool so we'll check

that out

uh we do not oh whoa whoa whoa whoa

what what

what oh you gotta be freaking kidding me

what oh my god

this is the gift that keeps on giving

folks do you are you seeing this

we do not model tesla's utility energy

storage or solar business in our models

they're not even modeling the power

packs are you freaking kidding me this

is going to be such a huge

profit center in the future oh my god

you think these price targets are

possible and you're giving

zero value to the energy division oh

oh my gosh this is the most bullish

thing i've seen in

tesla or about tesla like ever

what what

what oh i'm melting i'm melting

oh my gosh oh my gosh they are

oh my gosh they are so so bullish

uh wow that is that is freaky okay

let me go to my base case scenario here

really quick for me

okay this is my base case scenario for

2030

and like i'm happy with this look if i

get to

and i think i'm going to exceed this

because i tend to be very conservative

when i do these estimates

i think i'm going to be at least a 20

return

year over year compounded for the next

10 years investing in tesla

and some people after 2020 like

especially investors who started in 2020

it's like ha 20 i made 80 of 20 20.

2020 was an anomaly okay warren

buffett's average long-term rate of

return is 17

and that includes the crazy high

inflation years uh where rates of return

were substantially higher back in the

70s and 80s so keep that in mind

but anyway i think i could basically

match warren buffett

at the very least with with tesla in

in sort of a and this is a with a with

my base case scenario

on tesla not not bullish there we go

that's my base case scenario my

bull puts me at about a 24.2

rate of return i think we're going to

get to this in 2030 uh but

look folks i mean i'm including energy

i'm including

way more money uh but then again 4x the

insurance over arc

five years later that makes sense i'm

including way more money over here

in energy but in their bowl case

scenario they think they can get to this

kind of revenue with 2025 for their cars

which i don't have projected out until

2030. this is extremely bullish

if you are a tesla holder and and you're

investing off numbers that in my opinion

like these numbers that are conservative

uh and i know some people are gonna be

vomiting thinking like that's

conservative

fine whatever uh arc should just

make you feel even freaking better i

mean just literally

rock it to the moon uh check out the

course link down below and folks

we'll see in the next one thank you so

much for watching if you found this

helpful consider sharing and

wow bye

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