Renowned investor Ron Baron, who has been a steadfast advocate of Tesla (NASDAQ:TSLA) for years, recently shared his optimistic outlook for the electric vehicle (EV) manufacturer. Baron, an 80-year-old active manager with a remarkable track record in the investing world since the 1980s, has a unique perspective on Tesla’s growth potential.
Baron Capital’s Remarkable Journey
Baron’s illustrious investment journey began in 1982 when he founded Baron Capital, and his astute investment decisions have consistently outperformed the market. Impressively, 16 out of his 19 mutual funds, representing a staggering 98.8% of the firm’s total assets under management, have consistently outperformed their benchmarks since their inception. As of the close of 2022, Baron Capital was overseeing approximately $40 billion in assets.
A 20x Return on Tesla Investment
In a recent interview with CNBC, Baron reminisced about his initial investment in Tesla in 2014, highlighting the incredible returns his firm has reaped since then. He revealed that Baron Capital has seen a remarkable 20-fold return on their initial investment in TSLA. Over time, Tesla has become the largest holding in the Baron Partners Fund (BPTIX), the oldest and most significant fund managed by Baron Capital. However, Baron expressed his desire to acquire more TSLA shares but is currently unable to do so due to reaching his maximum holdings. He stated, “I think Tesla in the next seven years will be about four or five times as big as it is right now in the stock market… In the funds that I manage, I’ve been maxed out… when the stock went up 20 times… As far as buying more, I would buy more if I could, but I can’t.”
Growth Projections for Tesla
Baron’s optimism extends to his growth projections for Tesla’s core electric vehicle business. He anticipates a 30% increase in revenue for the company in 2023 and the following year. Additionally, Baron foresees substantial growth for Tesla Energy, projecting a tripling of its business over the next three years.
Belief in Elon Musk and SpaceX
Ron Baron’s confidence in Tesla’s CEO, Elon Musk, is unwavering. He has not only invested heavily in Tesla but has also become one of the largest investors in SpaceX. Baron currently holds an impressive 17.5 million shares of SpaceX, valued at over $1 billion today. He reiterated his faith in Musk’s visionary leadership, saying, “No company can compete because nobody can make these rockets go up and come down and land again.”
Baron’s insights and predictions offer a compelling perspective on the future growth of Tesla and the enduring impact of visionary leaders like Elon Musk in the realm of electric vehicles and space exploration.