Investor's Corner
Ron Baron discusses Tesla, SpaceX, and a curious move by GM
Renowned mutual fund manager and investment icon Ron Baron of Baron Capital is well-known for his conservative, long-term approach to stock picking over his 46 year career. He’s been compared to Warren Buffett (both for his investing style and outstanding track record) and recently created a bit of a stir when he predicted Tesla stock could hit $1,000 by 2020.
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Elon Musk being interviewed by Ron Baron at the 2015 Baron Capital conference (Image: Baron Funds)
Baron Funds second quarter commentary (via Valuewalk) includes a letter from Ron Baron highlighting some fascinating insights surrounding Tesla. To understand businesses, Baron notes the importance of, “the individuals who lead those businesses; and of the character and talent of the individuals… In the end, we think it’s all about people.” Baron cites an unnamed Tesla executive who told him, “It is amazing to me how little most people know about Tesla.”
Baron explains, “Few institutional investors have met with Elon and JB. Fewer still, we’re guessing, have met with the co-founder’s teaching instructor at Stanford. We believe fewer and fewer in the investment industry are performing even the most basic research on businesses… Our meeting with Dr. Yadigaroglu is one example of Baron Funds’ differentiated primary research approach.”
Above: Tesla co-founders, CEO Elon Musk and CTO JB Straubel, in the early days driving Tesla’s Roadster “P1” (Images: Tesla)
Furthermore, it turns out that, “while at Stanford, Ion was the teaching instructor for JB Straubel, Tesla’s CTO and chief engineer. Ion believes JB and his team are better at battery technology than anyone else. It was lucky for Ion that he met both Elon and JB. Ion invested in Tesla when it was just beginning, and so far has made a lot more than he did in eBay. After meeting Ion, we concluded it was lucky for Elon and JB they met Ion as well.”So who is Dr. Yadigaroglu? Baron elaborates, “As part of our ongoing effort to gain further insight into Tesla’s prospects, we recently met with Dr. Ion Yadigaroglu, a venture capitalist. Ion is an engineer with a doctorate in physics from Stanford. Ion has been programming since he was eight years old! Ion’s dad is a prominent nuclear scientist. So much for Ion’s creds. When Ion studied at Stanford graduate school, his roommate founded eBay. Ion’s $1,300 investment in the eBay startup became worth millions. In 1992, at the dawn of the Internet, Ion met Elon Musk. Elon had come to Palo Alto to research battery technologies in Stanford’s labs.”
In studying Tesla, Baron also points out parallels with SpaceX. SpaceX, as Musk had originally envisioned it, has been able to reinvent the aerospace industry by reducing costs and, ultimately, saving millions with it’s reusable rockets. Baron reminds us, “Elon Musk’s SpaceX were [also] awarded contracts to design, build, and fly new spacecraft to ferry U.S. astronauts to the International Space Station (ISS)… The cost of commercial flights to the ISS will be a fraction of the cost of previous government flights, in part because rockets will be reusable.”
Similar to SpaceX, Musk’s emphasis on driving down costs remains mission critical at Tesla. Baron notes, “Despite Tesla’s requirements [for] functional design resulting in minimal waste, it often obtains better pricing for outsourced parts than its competitors. We believe its parts vendors try to accommodate this unique and fast growing company because they think Tesla’s engineering skills and designs will make them better suppliers! Further, since Tesla can insource production, it has the advantage of knowing exactly what a product should cost and how to produce it.”
And, according to Baron, GM is now following Tesla’s lead on this front. He notes that, “Mary T. Barra, General Motors’ CEO who has been trained as an engineer, has instructed her supply chain to ‘use Tesla suppliers…even if they cost more!’ Her rationale is that despite incurring higher costs to build a car, maintenance and warranty costs will be lower; car safety will be improved; and GM’s reputation will be enhanced.” That said, it might be worth pondering whether or not this move was executed strictly for reasons Baron stated in his letter — after all, GM has a tense, and sometimes adversarial, history with Tesla.
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Note: Article originally published on evannex.com, by Matt Pressman
Source: Valuewalk via Baron Funds
Tesla (NASDAQ: TSLA) stock received a price target update from Pierre Ferragu of Wall Street firm New Street Research, citing the company’s growing lead in self-driving and autonomy.
On Tuesday, Ferragu bumped his price target from $520 to $600, stating that the consensus from the Consumer Electronics Show in Las Vegas was that Tesla’s lead in autonomy has been sustained, is growing, and sits at a multiple-year lead over its competitors.
CES 2026 validates Tesla’s FSD strategy, but there’s a big lag for rivals: analyst
“The signal from Vegas is loud and clear,” the analyst writes. “The industry isn’t catching up to Tesla; it is actively validating Tesla’s strategy…just with a 12-year lag.”
The note shows that the company’s prowess in vehicle autonomy is being solidified by lagging competitors that claim to have the best method. The only problem is that Tesla’s Vision-based approach, which it adopted back in 2022 with the Model 3 and Model Y initially, has been proven to be more effective than competitors’ approach, which utilizes other technology, such as LiDAR and sensors.
Currently, Tesla shares are sitting at around $433, as the company’s stock price closed at $432.96 on Tuesday afternoon.
Ferragu’s consensus on Tesla shares echoes that of other Wall Street analysts who are bullish on the company’s stock and position within the AI, autonomy, and robotics sector.
Dan Ives of Wedbush wrote in a note in mid-December that he anticipates Tesla having a massive 2026, and could reach a $3 trillion valuation this year, especially with the “AI chapter” taking hold of the narrative at the company.
Ives also said that the big step in the right direction for Tesla will be initiating production of the Cybercab, as well as expanding on the Robotaxi program through the next 12 months:
“…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
Tesla analyst breaks down delivery report: ‘A step in the right direction’
Tesla has transitioned from an automaker to a full-fledged AI company, and its Robotaxi and Cybercab programs, fueled by the Full Self-Driving suite, are leading the charge moving forward. In 2026, there are major goals the company has outlined. The first is removing Safety Drivers from vehicles in Austin, Texas, one of the areas where it operates a ride-hailing service within the U.S.
Ultimately, Tesla will aim to launch a Level 5 autonomy suite to the public in the coming years.
Investor's Corner
Tesla Q4 delivery numbers are better than they initially look: analyst
The Deepwater Asset Management Managing Partner shared his thoughts in a post on his website.
Longtime Tesla analyst and Deepwater Asset Management Managing Partner Gene Munster has shared his insights on Tesla’s Q4 2025 deliveries. As per the analyst, Tesla’s numbers are actually better than they first appear.
Munster shared his thoughts in a post on his website.
Normalized December Deliveries
Munster noted that Tesla delivered 418k vehicles in the fourth quarter of 2025, slightly below Street expectations of 420k but above the whisper number of 415k. Tesla’s reported 16% year-over-year decline, compared to +7% in September, is largely distorted by the timing of the tax credit expiration, which pulled forward demand.
“Taking a step back, we believe September deliveries pulled forward approximately 55k units that would have otherwise occurred in December or March. For simplicity, we assume the entire pull-forward impacted the December quarter. Under this assumption, September growth would have been down ~5% absent the 55k pull-forward, a Deepwater estimate tied to the credit’s expiration.
“For December deliveries to have declined ~5% year over year would imply total deliveries of roughly 470k. Subtracting the 55k units pulled into September results in an implied December delivery figure of approximately 415k. The reported 418k suggests that, when normalizing for the tax credit timing, quarter-over-quarter growth has been consistently down ~5%. Importantly, this ~5% decline represents an improvement from the ~13% declines seen in both the March and June 2025 quarters.“
Tesla’s United States market share
Munster also estimated that Q4 as a whole might very well show a notable improvement in Tesla’s market share in the United States.
“Over the past couple of years, based on data from Cox Automotive, Tesla has been losing U.S. EV market share, declining to just under 50%. Based on data for October and November, Cox estimates that total U.S. EV sales were down approximately 35%, compared to Tesla’s just reported down 16% for the full quarter. For the first two months of the quarter, Cox reported Tesla market share of roughly a 65% share, up from under 50% in the September quarter.
“While this data excludes December, the quarter as a whole is likely to show a material improvement in Tesla’s U.S. EV market share.“
Elon Musk
Tesla analyst breaks down delivery report: ‘A step in the right direction’
“This will be viewed as better than feared deliveries and a step in the right direction for the Tesla story heading into 2026,” Ives wrote.
Tesla analyst Dan Ives of Wedbush released a new note on Friday morning just after the company released production and delivery figures for Q4 and the full year of 2025, stating that the numbers, while slightly underwhelming, are “better than feared” and as “a step in the right direction.”
Tesla reported production of 434,358 and deliveries of 418,227 for the fourth quarter, while 1,654,667 vehicles were produced and 1,636,129 cars were delivered for the full year.
Tesla releases Q4 and FY 2025 vehicle delivery and production report
Interestingly, the company posted its own consensus figures that were compiled from various firms on its website a few days ago, where expectations were set at 1,640,752 cars for the year. Tesla fell about 4,000 units short of that. One of the areas where Tesla excelled was energy deployments, which totaled 46.7 GWh for the year.
🚨 Wedbush’s Dan Ives has released a new note on Tesla $TSLA:
“Tesla announced its FY4Q25 delivery numbers this morning coming in at 418.2k vehicles slightly below the company’s consensus delivery estimate of 422.9k but much better than the whisper numbers of ~410k as the…
— TESLARATI (@Teslarati) January 2, 2026
In terms of vehicle deliveries, Ives writes that Tesla certainly has some things to work through if it wants to return to growth in that aspect, especially with the loss of the $7,500 tax credit in the U.S. and “continuous headwinds” for the company in Europe.
However, Ives also believes that, given the delivery numbers, which were on par with expectations, Tesla is positioned well for a strong 2026, especially with its AI focus, Robotaxi and Cybercab development, and energy:
“This will be viewed as better than feared deliveries and a step in the right direction for the Tesla story heading into 2026. We look forward to hearing more at the company’s 4Q25 call on January 28th. AI Valuation – The Focus Throughout 2026. We believe Tesla could reach a $2 trillion market cap over the coming year and, in a bull case scenario, $3 trillion by the end of 2026…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
It’s no secret that for the past several years, Tesla’s vehicle delivery numbers have been the main focus of investors and analysts have looked at them as an indicator of company health to a certain extent. The problem with that narrative in 2025 and 2026 is that Tesla is now focusing more on the deployment of Full Self-Driving, its Optimus project, AI development, and Cybercab.
While vehicle deliveries still hold importance, it is more crucial to note that Tesla’s overall environment as a business relies on much more than just how many cars are purchased. That metric, to a certain extent, is fading in importance in the grand scheme of things, but it will never totally disappear.
Ives and Wedbush maintained their $600 price target and an ‘Outperform’ rating on the stock.
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