On the eve of Tesla's anticipated Robotaxi release, a comprehensive analysis by a prominent Wall Street analyst explores the potential outcomes for Tesla (TSLA, Financial) in the autonomous taxi market. Pierre Ferragu, Chief Analyst at New Street Research, employed a decision tree approach to outline various scenarios that could impact Tesla's future valuation significantly.
At the core of Ferragu's analysis is whether Tesla can achieve fully autonomous driving without human supervision. This technological milestone serves as a critical branching point in his scenarios, each affecting Tesla's market position and valuation by 2030 differently.
If Tesla fails to launch an autonomous taxi service, its baseline valuation remains at $1.4 trillion. Conversely, if Tesla dominates the market amid limited competition, its optimistic valuation could reach $4.7 trillion. Currently, Tesla's market value stands at approximately $770 billion.
Ferragu identifies several crucial decision points: Can Tesla achieve unsupervised Full Self-Driving (FSD)? Can this FSD operate Robotaxi services? Is Tesla's Robotaxi service scalable? Can competitors scale up?
The most conservative scenario suggests that Tesla cannot launch an autonomous taxi service, with FSD improvements merely boosting margins by 2%. In the most optimistic scenario, Tesla would capture over 80% of the autonomous taxi market without partnerships with established ride-hailing companies.
Ferragu's intermediate scenario considers Tesla collaborating with companies like Uber to gradually penetrate human-driven fleets or facing competition from multiple robotic taxi fleets, where Tesla garners a 50% market share.
Notably, Ferragu anticipates significant growth even if Tesla cannot fully deploy autonomous taxis. The baseline scenario predicts Tesla's annual car production will rise from 2 million in 2023 to 7 million by 2030, with other revenue streams like energy storage increasing correspondingly.
The report underscores the transformative potential of successfully deploying autonomous taxis for Tesla's business model and valuation. However, it also acknowledges the need to overcome technical and regulatory challenges to realize more optimistic scenarios.
