Ark's Open Source
ARK analysts Tasha Keeney says the Expected Value For Tesla In 2026: $4,600 per Share.
We provide this open-source model to the public because we believe doing so strengthens the quality of our research. By sharing our assumptions and modeling methodologies we hope to solicit constructive feedback and criticism. As with open-source software, we believe that open-source research will prove to be more robust and accurate than research conducted non-transparently behind closed doors.
Methodologically, we arrive at our base-case share price by averaging one million simulations produced by our Monte Carlo model.
This research update is based on ARK’s new open-source Tesla model, which incorporates distributions for 38 independent inputs to simulate a range of potential outcomes for the company.
Tesla’s prospective robotaxi business line is a key driver, contributing 60% of expected value and more than half of expected EBITDA in 2026.
- Tesla sold 900,000 vehicles in 2021. ARK assumes the bear case scenario of 10 million cars in 2026 with the bullish case at 17 million.
- Curiously, the bull market selling price is 30,000 with a bear market selling price with an average selling price of $38,000.
- The bear market total gross margin is 50% while the bull market gross margin is 56%.
- The compound annual growth rate CAGR is 24% per year in the bear case and 42% in the bull scenario.
- Tesla robotaxi delivery best case starts this year, worst case 2030, otherwise between 2023 and 2026 with a midpoint of 2024. the article states Tesla will commercialize autonomous ride-hail in 2024.
- Tesla enters the insurance business and will sell 50% of its cars with insurance by 2026.
- Tesla will capture 50% of the autonomous market outside China and 10% in China.
Modeled Share Price Outcomes
Looking Further Ahead
You can Download the ARK Spreadsheets and make changes to the model if you choose.
I came up with $639 per share in 2026.
Some of my changes may be way off in either direction. But in general, the base spreadsheet seems absurdly optimistic.
Is Tesla really going to capture 50% of the autonomous market outside China and 10% in China?
Will that sales be as big as ARK assumes? 17 million vehicles? Really?
The base case pretty much assumes the rest of the market will stand still. There will be no value added for autonomous driving if every manufacturer has it.
And right now Waymo (Google) is far ahead of Tesla in driving capability. I gave Tesla a very generous cut of China. Five percent would not surprise me in the least.
My generous calculation is Tesla at $639. Since those are 2026 numbers, what is the 2023 bear market valuation going to be.
Tesla is ARKK's largest position with a weight of 8.69%.
What About Recession?
A recession and hard landing is on the way. What will it look like?
Forget About a Soft Landing, What's the Shape of the hard landing?
None of the near-term valuation factor in a recession or bear market valuations.
Tesla Market Cap Predictions
At $1,000 per share Tesla has a market cap of about $1 trillion.
By 2030 ARK predicts a share price of about $22,500 equating to a market cap of roughly $22.5 trillion.
US Real GDP in 2021 was $19.8 Trillion.
ARK is predicting the valuation of Tesla will exceed the entire US real GDP by the early 2030s.
Yes, this is more than ridiculous. It also says something about ARK's open source share price model.
This post originated at MishTalk.Com.
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