Tesla Motors, Inc. (NASDAQ: TSLA), (ARKK) – Cathie Wood, Ark Funds imposes new $ 3,000 price target for Tesla shares: what investors need to know

Ark Funds CEO and co-founder Cathie Wood joined Benzinga earlier this month for the “Raz Report” interview. At that point, Wood promised that a new price target on Tesla would come from Ark.

Friday it arrived.

Ark Funds on Tesla: Ark Funds has its price target for shares of Tesla Ing (NASDAQ: TSLA) up to $ 3000 in the year 2025.

Last year, Ark Funds listed a split adjusted price target on Tesla shares of $ 1,400 by 2024.

Ark Funds uses a Monte Carlo model, based on a series of simulations to determine the probability of different results with random variables. A total of 34 inputs and more than 40,000 possible simulations were used to create the new price target.

The case of Ark Funds is that Tesla’s shares will reach $ 1,500 in 2025. The new bullcase from Ark Funds is that Tesla shares should reach $ 20,000 by 2025.

The price target of Ark Funds does not include Tesla’s energy storage or solar power business in the models. The impact of the price of Bitcoin is also not included in the model of Ark Funds.

See also: How to Invest in Tesla Stock

Growing forward: Ark Funds said Tesla could sell between 5 million and 10 million vehicles by 2025 after new technology and production improvements. Tesla sold more than 500,000 vehicles in 2020.

The average selling price for Tesla’s electric vehicles was $ 50,000 in 2020. Ark asks that the figure be between $ 36,000 and $ 45,000 in the new price target model.

For the first time, Ark Funds is taking insurance opportunities into its forecasting model.

“Ark estimates that Tesla can achieve better than average insurance margins thanks to the very detailed management data it collects from customer vehicles,” Ark said in the report.

Tesla launched its insurance product in 2019. It is currently only available in California. Ark believes that in the next few years, Tesla can extend insurance to other states and endorse its own policies.

Ark Funds has updated its pricing model for Tesla to include assumptions about fully autonomous driving. Ark estimates the probability of delivering fully autonomous management by 2025 at 50%. Ark previously had a 30% chance by 2024.

Related Link: Car Companies Providing Shareholders Instead of Future Growth Will Be Sorry: Cathie Wood

Ark Funds and Tesla: Wood has been a notable Tesla bull for years. She gave a combined price target of $ 800 that was criticized by many people on Wall Street. Her prediction came true earlier this year.

Tesla is the largest stakeholder in the Ark Innovation ETF (NYSE: ARKK) with more than 3.7 million shares worth $ 2.4 billion.

Tesla is also the largest shareholder in the Ark Next Generation Internet ETF (NYSE: ARKW) with 1.1 million shares worth $ 752.5 million.

Tesla represents 10.5% of the assets in both ARKK and ARKW.

Price action: Shares in Tesla closed at $ 654.87 on Friday. Tesla shares have traded between $ 82.10 and $ 900.40 over the past fifty-two weeks.

Watch the full interview with Cathie Wood and Benzinga here.