Follow me on Twitter: https://twitter.com/heydave7

Follow me on Instagram: https://www.instagram.com/heydave7

In this video, I evaluate Cathie Wood's (Ark Invest) $6000 price target model for Tesla stock (TSLA).

Here's the direct link to Ark Invest's TSLA valuation model:

https://github.com/ARKInvest/ARK-Invest-Tesla-Valuation-Model

https://ark-invest.com/research/tesla-valuation-model

Note: I didn't critique the model itself due to time constraints but rather focused on the assumptions inputted. I think that the model itself also has significant flaws but will save that for a later time. In the video I said that $2000 wasn't my price target but rather it was the price target that was given by Ark's model if we changed the assumptions to more reasonable ones that I mentioned.

I agree with Cathie Wood on Tesla’s dominant position in the markets they are addressing. I also agree with the potential of the Robotaxi network as a lucrative software as a service model with very high margins.

However, I think Cathie Wood is underestimating some of the complexity of a Robotaxi network rollout and that skews her assumptions to be overly optimistic.

More specifically, here are some assumptions I don’t agree with .

I think 37 million EVs sold in 2024 is a few years too early.

I think 3 million Tesla cars sold in 2023 is also a bit too optimistic. My estimates are more around 2M cars in 2023.

She assumes 7.2 million Robotaxi-eligible Tesla cars in 2023. My estimate is 5.5 million.

She assumes 70% will enroll their Tesla cars as full (or close to) Robotaxis with an average usage of 116,000 miles per year.

I make much more conservative estimates with much lower participation rates in 2023. 25% will offer their cars as full-time or close to full-time Robotaxis maybe averaging 60-80k miles per year, 25% as part-time averaging 20-40k miles per year, and 50% won’t participate in 2023 (although participation rates might increase over time).

When I input my numbers into the Ark Invest valuation model, I get a much lower price target of around $2000.

I do have additional critiques of the overall valuation model they use, but will save them for another video.

Would you like to see me interview Cathie Wood directly regarding their TSLA valuation model? If so, you can contact Ark Invest directly at https://ark-invest.com/contact and ask them to reach out to me and I'd be happy to do an interview.

And please share this video with others on Reddit, Facebook groups, and forums.

Check out my archived articles/posts on Tesla: https://teslamotorsclub.com/tmc/threads/articles-megaposts-by-davet.23473/#post-485768

Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel.

Tags: Tesla, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

Subscribe to Dave Lee on Investing on Soundwise