Tesla (TSLA) has been grabbing attention with its new robotaxi debut in Austin, Texas. However, the shares have dropped by 20% during the last six months. If you’re considering investing in this renowned growth stock at a lower price, this might be an excellent opportunity for years to come.
Tesla’s robotaxi division could lead a $10 trillion global market
At first glance, Tesla stocks seem quite expensive compared to similar companies in the market. They are trading at 11.5 times their total sales. However, when considering other electric vehicle (EV) stocks like Rivian Automotive and Lucid Group, which trade at 2.7 times and 7.1 times their sales respectively, Tesla’s higher price might seem less appealing. But if we focus solely on the potential of the robotaxi opportunity, Tesla’s premium could justify its cost.
Cathie Wood, CEO of Ark Investment Management, is convinced that the market for robotaxis will be enormous. In her words, “We estimate the total value of the autonomous taxi industry worldwide to be between $8 trillion and $10 trillion, growing rapidly from virtually zero.” She emphasizes this rapid growth is due to the significant impact Artificial Intelligence (AI) will have on the realization of these technologies.
In approximately the next five years, Wood anticipates that Tesla’s stock price could soar to around $2,600. (It currently stands at $322 as of Wednesday.) She estimates that over 90% of this growth is attributed to the potential success of their robotaxi service.
Wood is well-known for making daring forecasts. On this occasion, she isn’t the only one voicing such opinions. Analyst Dan Ives estimates that the potential worth of robotaxis could increase Tesla’s market capitalization by a staggering $1 trillion by the year 2026.
The potential for robotaxis offered by Tesla may not reach its full potential immediately, possibly stretching over many years or even decades. However, Tesla holds two significant advantages over much of its competition: a strong brand identity and unparalleled access to financial resources. With a market capitalization of $950 billion, Tesla can effortlessly secure billions of dollars in funding without significantly impacting existing shareholders. Moreover, while Tesla’s reputation has suffered some setbacks lately, surveys indicate that the overwhelming majority of Tesla owners continue to exhibit unwavering enthusiasm for the company.
From an onlooker’s perspective, the potential for Tesla’s autonomous taxi service is immense. The company’s renowned brand and substantial financial resources set it apart as a compelling long-term investment choice for those who believe in the future of robotaxis.
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2025-07-20 04:05