Tesla will become a $2 trillion company, says billionaire Tesla shareholder Ron Baron – CNBC

Billionaire investor Ron Baron believes Tesla, whose shares have surged more than 400% this year, will be a $2 trillion company.

Baron, a longstanding Tesla shareholder, said Wednesday morning on CNBC’s “Squawk Box” that he believes Tesla’s vehicle sales will grow 50% annually in the coming years. Tesla’s current market cap is $416.2 billion.

“We’re very excited about that,” he said.

His investment firm Baron Capital, with $39.9 billion in assets under management, held more than 7.3 million Tesla shares as of Sept. 30. They were purchased at an average cost per share of $43.07, according to the firm. It has made about 10 times its money in investing in the electric auto maker.

“I’ve said for a long time, I thought it was going to be $1 [trillion] to $2 trillion. With what developments have taken place recently, I think $2 trillion is the right number. So I think it’s five times from here,” Baron said.

If Tesla can achieve a $1 trillion valuation, it would join well-known technology companies such as Amazon, Microsoft and Google-parent Alphabet. Apple’s market cap is already about $2.1 trillion.

Shares of Tesla are up more than 400% this year through Tuesday’s close. The stock begin trading on a split-adjusted basis on Aug. 31 following a 5-for-1 stock split.

Tesla shares have been volatile since Baron invested in the automaker. He described it as going “up and down like a yo-yo.”

At Tesla’s 2020 shareholder’s meeting last month,