Tesla rose 5.21% on Monday while SpaceX ($SPCX) slipped 0.40%. The divergence highlights an important question: are investors increasingly valuing Tesla for its autonomous driving ambitions rather than its traditional electric vehicle business?
ARK Invest’s latest model puts Tesla’s potential share price at $4,400 by 2031, with Robotaxi accounting for roughly 80% of projected enterprise value. That is an extremely ambitious long-term forecast, not a guaranteed outcome. But it shows just how much Tesla’s valuation could depend on turning autonomous driving into a large, profitable business.
1. Why Robotaxi could change Tesla’s economics
Tesla’s traditional business depends heavily on selling vehicles. Revenue is generated when customers buy cars, and growth requires continued demand, production capacity and competitive pricing.
Robotaxi offers a different model.
If Tesla can operate a large network of autonomous vehicles, each vehicle could potentially generate revenue repeatedly through paid rides. Higher vehicle utilisation could spread fixed costs across more trips, while software and fleet optimisation could improve margins as the network scales.
In theory, this creates a recurring revenue stream rather than relying entirely on new vehicle sales.
However, the economics depend on more than the number of rides. Insurance, cleaning, charging, maintenance, vehicle depreciation, remote assistance and fleet operations all affect profitability. A growing fleet is not necessarily a profitable fleet.
2. The milestone that matters most
For me, the most convincing evidence would be several consecutive quarters of positive Robotaxi contribution margins, accompanied by expanding service areas and rising paid ride volumes.
That would help demonstrate that the business can operate economically beyond a limited launch.
Investors should watch for:
• Paid ride growth: Are customers using the service regularly, rather than simply trying it once?
• Geographic expansion: Can Tesla enter new cities without lengthy delays caused by regulatory approval or operational challenges?
• Safety performance: Can the company demonstrate reliable autonomous operations as the number of vehicles and miles increases?
• Cost per mile: Can Tesla lower the full cost of providing each ride while maintaining service quality?
• Financial disclosure: Will Tesla provide enough information to evaluate Robotaxi revenue, operating costs and profitability separately?
These measures would provide more useful evidence than a rising share price or another ambitious forecast.
3. The risk behind ARK’s $4,400 target
ARK’s forecast depends on assumptions about adoption, pricing, fleet expansion and future profitability. Small changes in these assumptions can produce very different valuations.
Regulatory approval could take longer than expected. Competitors could reduce prices, and autonomous driving technology may require more investment before it can operate reliably at scale.
Tesla also needs to fund its other ambitions, including Optimus and AI infrastructure. If Robotaxi takes longer to generate substantial cash flow, those projects could place additional pressure on capital spending.
The key distinction is between a company with a potentially transformative technology and one that has demonstrated a scalable, profitable business.
4. What about SpaceX?
SpaceX adds another layer to the investment story, particularly as reports of a potential combination with Tesla attract attention.
A closer relationship between the businesses could create opportunities in computing, AI and communications. However, any potential merger would need to be assessed on its terms, valuation, governance and implications for existing shareholders.
Investors should avoid treating a possible transaction as guaranteed or assuming that combining two ambitious businesses automatically creates additional shareholder value.
My takeaway
Tesla’s Robotaxi opportunity is significant, but the market needs evidence that it can become a durable earnings engine.
The milestone I would watch most closely is sustained positive unit economics across an expanding Robotaxi network. More cities, more rides and stronger safety performance would support the growth case, but consistent profitability would make it much more convincing.
ARK’s $4,400 target illustrates the potential upside if its assumptions prove correct. It also shows the risk: if Robotaxi adoption or profitability falls short, a major part of that projected value could be difficult to justify.
For discussion purposes only. This is not financial advice.
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