As Tesla prepares to unveil its Robotaxi, industry analysts are weighing in on what could be the biggest catalyst for the company’s stock.
Many believe the Robotaxi and Tesla’s Full Self-Driving (FSD) technology will be game-changers. The potential for vehicle owners to earn passive income through a Robotaxi fleet and the possibility of licensing FSD to other automakers seem like obvious boosts for Tesla’s value.
However, Gary Black of The Future Fund has a different perspective. He argues that Tesla’s upcoming $25,000 vehicle could be an even more significant driver for the company’s shares.
Black’s rationale? By entering the affordable compact sector, Tesla could capture market share from established players like Toyota’s Corolla, potentially leading to increased sales and higher stock prices.
In an interview with Schwab Network, Black explained:
“My $270 [price target] just includes a take rate on FSD. I include nothing for Robotaxi. I have a big energy ramp-up over the next ten years and a big services ramp-up. But the auto business is the big chunk of that $270. Look, you can be excited about owning $TSLA, and the most important thing to me is the $25,000 to $30,000 car…This is very reminiscent of 2020, when they introduced the Model Y. The Model Y was a new category…the bears said it was just a big Model 3. That is not true because you get a whole new TAM going into a new category…Once you have a compact, you’re bringing the Tesla brand, and its performance, and its safety record, and all the things people love about Tesla…and you’re putting it in the compact category. They’re going to take a lot of market share by doing that.”
While Black’s analysis is intriguing, it’s worth noting that the potential impact of a fully autonomous driving system and Robotaxi service could be more transformative than introducing a new vehicle in an existing market segment. No company has yet achieved full autonomy, and being first to market could open up unprecedented opportunities for Tesla.
Nevertheless, the excitement surrounding a $25,000 Tesla vehicle shouldn’t be underestimated. It could significantly expand the company’s customer base and market presence.
As Tesla continues to innovate in multiple areas, investors and industry watchers will be closely monitoring which developments truly drive the company’s future growth and stock performance.
