ARK Predicts Tesla Robotaxi to Outpace Uber, Lyft by 2025

Tesla investment firm ARK Invest has released an ambitious forecast for Tesla’s upcoming Robotaxi service, projecting it to become a “multi-trillion dollar” venture that could overshadow traditional ride-sharing companies Uber and Lyft starting in 2025.

During Tesla’s recent “We, Robot” event and Q3 2024 Earnings Call, CEO Elon Musk announced plans to launch autonomous ride-sharing services in California and Texas next year.

While the recently unveiled Cybercab won’t be part of the initial rollout, Tesla plans to utilize its existing fleet equipped with Hardware 4 for the service.

The status of vehicles with Hardware 3 remains uncertain regarding their self-driving capabilities.

ARK’s financial analysis highlights a significant cost advantage for Tesla’s Robotaxi service.

According to their projections, Tesla could offer rides at $0.30-0.40 per mile at scale, once safety drivers are eliminated.

This rate is substantially lower than current ride-hailing costs of approximately $2 per mile and personal car ownership costs of $0.70 per mile.

ARK’s own estimates suggest costs could be even lower, at around $0.25 per mile.

The investment firm attributes these competitive rates to the operational efficiency of electric vehicles, which they note cost roughly one-third as much to operate as traditional gas-powered vehicles. This pricing advantage could potentially unlock an $11 trillion revenue opportunity, approximately 80 times larger than Uber and Lyft’s current target market.

However, Tesla still faces significant challenges, particularly in perfecting its Full Self-Driving technology before launching driverless services.

Despite these hurdles, ARK maintains an optimistic outlook, predicting a ten-fold increase in Tesla’s stock value, largely driven by the disruptive potential of its Robotaxi fleet in the automotive sector.

The firm’s bullish forecast also factors in Tesla’s plans to release a more affordable vehicle in the first half of 2025, which, combined with the Robotaxi service, is expected to significantly boost the company’s revenue potential.