Tesla Robotaxi: Potentially $1.3 Trillion Of Incremental Enterprise Value In 2030

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Cavenagh Research
8.76K Followers
(11min)

Summary

  • I previously voiced a negative opinion on Tesla, Inc. stock, but I must now acknowledge the potential of Tesla's robotaxi business, reflecting on progress achieved through FSD 1.
  • Estimating robotaxi economics involves calculating fixed and variable costs, with a break-even revenue of $14,000/year and a target profit of $10,000/year.
  • A robotaxi needs to earn $0.48/mile to hit a $10,000 annual profit, which is competitive compared to current ride-hailing rates in cities like San Francisco.
  • Tesla could partner with Uber or Lyft, netting $0.75/mile after a 25% commission, resulting in a $14,125 annual profit per vehicle.
  • Building on reasonable assumptions. According to my estimates, the robotaxi business line could potentially add $1.3 trillion of enterprise value to Tesla by 2030.

Tesla Signage at Delivery Front Entrance

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In August this year, I voiced a negative opinion on Tesla, Inc. (NASDAQ:TSLA) stock, arguing that I see a “weak AI promise on top of a struggling EV business.” Since the publication of the article, Tesla shares have

This article was written by

Cavenagh Research profile picture
8.76K Followers
Experience as an investment analyst for a major BB-Bank, as well as private equity consultant for MBB. Currently working towards the CFA charter, having completed I&II. Passion for risk-assets (Growth, Contrarian, Emerging Market) ex-colleague and close friend of Investor Express

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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