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Ron Baron Remains A Tesla Bull Despite Its 'Self-Inflicted Wounds'

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Ron Baron Remains A Tesla Bull Despite Its 'Self-Inflicted Wounds'

Many investors count Ron Baron as one of the biggest Tesla Inc (NASDAQ: TSLA) bulls given his prior calls for the electric car marker to increase revenue from $21.5 billion in 2018 to $1 trillion in revenue by 2030.

On Tuesday, he sat down for an interview with CNBC and explained why he remains optimistic about the company's outlook despite some recent hiccups.

What Happened

Baron, a billionaire investor and CEO of Baron Capital, said he bought Tesla stock in 2014 when total revenue was less than $3 billion. Since then, revenue has grown 10 times and is expected to increase to as much as $40 billion next year en route to $100 billion in revenue in the coming years.

Despite a more than 30% decline in Tesla's stock in 2019, Baron said he hasn't sold shares.

The company's opportunity in the electric vehicle market remains unchanged, Baron said, adding that he isn't concerned by recent "self-inflicted wounds" that he did not specify.

Why It's Important

Tesla's biggest opportunity comes from the 90 million vehicles sold in the U.S.,of which Tesla accounts for just 350,000 to 400,000, he said.

This puts Tesla in a unique position of being the sole automaker to grow sales. Tesla's refined production process over the years coupled with factories in China means the company can manufacture a car for 70% less, Baron said.

What's Next

Tesla at its core has a similar story as some of Baron's prior investments.

For example, he said he was a founding investor of Wynn Resorts, Limited (NASDAQ: WYNN) after he "studied the land" — but before the casino was operational. After Baron's initial investment at $20 per share, the stock moved lower to $13, but over time soared to $150.

"We invest all the time when businesses are growing," he told CNBC.

Tesla's stock traded around $226 per share at time of publication.

Related Links:

Tesla To Offer Free Unlimited Supercharging

From $420 To $230: Where Tesla Stands One Year After Elon Musk's 'Funding Secured' Tweet

Photo courtesy of Tesla.

Posted-In: Baron Capital CNBC electric cars EVs Ron BaronTop Stories Media Best of Benzinga

 

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