ARK Invest’s CEO and CIO Cathie Wood reiterated on Wednesday the firm’s ‘bullish’ view on Tesla, with the launch of a cheaper model this year and the brand’s robotaxi service cutting consumer costs. ARK’s price target on Tesla implies the Elon Musk-led company to reach a market cap of over $8 trillion by 2029.
“News cycles pass quickly nowadays, and the best cars are going to win,” the asset manager said about the recently imposed auto tariffs in an interview with Barron’s. Wood added that investors should “look beyond current volatilities”, dismissing the impact on Tesla, as the company sources most of its components in North America.
“When businesses and consumers are scared, they’ll change the way they do things, and that’s usually good for the companies that are helping others do things better, cheaper, faster, more creatively, and more productively,” she said.
Cheaper Model
ARK Invest’s chief noted that the Elon Musk-led brand will release a model that is ‘half the price of a typical Model Y’, at $30,000. “This will help bring affordability back into auto buying,” the investor said, adding that the model will be out this quarter.
In the latest shareholder deck released in late January, Tesla revealed “plans for new vehicles, including more affordable models … in the first half of 2025,” without cutting on quality, as they “will be produced on the same manufacturing lines” as the current vehicle line-up.
“This approach will result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes”, the carmaker explained. “This should help us fully utilize our current expected maximum capacity of close to three million vehicles, enabling more than 60% growth over 2024 production.”
Cybercab
Wood believes that Tesla’s robotaxi service will be cheaper than Uber and Lyft, as it reduces costs without a human driver. Based on Wright’s Law, the firm believes that Tesla can make a profitable Cybercab model “at a price of $15,000 or below,” ARK’s report defended in February.
“Our purpose-built Robotaxi product […] will continue to pursue a revolutionary ‘unboxed’ manufacturing strategy and is scheduled for volume production starting in 2026,” Tesla stated, as the robotaxi starts testing in Austin, Texas, where the company is based.
2025 Outlook
Late last year, Elon Musk said he expected Tesla‘s sales to grow 20-30% in 2025, a target that was updated by the company in late January to a “return to growth” outlook.
“With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025,” the EV maker stated. “The rate of growth will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment.”
Tesla delivered 1,789,226 EVs in 2024, down 1% from 1.81 million in the previous year. In the first quarter of 2025, the brand delivered 336,700 vehicles, a drop of 12.6% year over year.
In an interview with Bloomberg in March, Ark Invest’s chief executive stated that Tesla remains competitive among Chinese rival BYD’s growing sales in the U.S. and globally, based on range and power for a given price.
2029 Price Target
Last year, Wood predicted that the Cybercab business could drive “90% of Tesla’s enterprise value and earnings” in 2029. In a note posted in June 2024, Ark set a price target for Tesla’s shares of $2,600 in 2029, with a bear case of $2,000 and a bull case of $3,100. The price target would imply a market cap of up to $8.3 trillion.
Two weeks ago, Cathie Wood reaffirmed her belief in Tesla, maintaining the price target of $2,600 in 2029. It implies an upside potential of nearly 10 times its current price (last close at $252), up over 900%.
Elon Musk
Cathie Wood was on CNBC in early February, where she noted that companies need to “invest aggresively like Tesla did … in order to capitalize on massive opportunities.” She added that “with AI, it’s winner-take-most opportunities.”
When asked about Elon Musk’s involvement in Trump’s Administration, Wood said she is “actually thrilled” that Tesla‘s CEO is “spending time making the Government more efficient.”
The chief executive stated that Ark Invest looks carefully at “how management is spending his time,” calling Elon Musk a visionary leader who is “surrounding himself by brilliant people who want to solve very hard problems.”
The investor dismissed the criticism on Musk: “If you had listened to Tesla’s last conference call last week you would see how focused Elon is on any pain points or bottle necks, on getting this autonomous taxi network up and running this year clearly”.
“He’s maniacally focused, seems to me, more than I understood before listening, on humanoid robots”, she said, adding that the firm believes “humanoid robots will benefit small companies more than large companies, which is a big change.”
