tesla‘s (NASDAQ:TSLA) Stocks remain a battleground between bulls and bears, with the latter appearing to be winning so far this year. It is a crucial year for the company, setting the direction for the coming years.
No one is buying Tesla stock solely for its electric vehicle (EV) or energy businesses, because the valuation (Tesla trades at 161 times analyst consensus for 2026 earnings) is high. Instead, investors are pricing in a substantial rise in profits from its robotaxi and, later, Optimus robot business, as well as continued gains from electric vehicles and energy.
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However, the key near-term catalyst is the robotaxi business, not least because it will, in theory, generate a fast-growing recurring revenue stream from commissions for every mile traveled in a robotaxi, as well as software revenue from fully autonomous vehicle subscriptions and fee income.
The development of the robotaxi is behind the spectacular increase in profits that Wall Street analysts predict for Tesla in the coming years. The chart below shows the average earnings per share (EPS) estimate and the huge difference between the low and high estimates. Let’s put it this way: the high estimate in 2030 is almost three times the low figure, so assuming both analysts set the same valuation multiple, then one could say that one target will be three times higher than the other.
The massive growth in estimated average earnings (a compound annual growth rate of 47% through 2030) clearly discounts robotaxi revenue growth.
But here’s the thing. Tesla’s robotaxi business isn’t scaling as fast as anyone would expect, and certainly not as fast as CEO Elon Musk’s public announcements suggest.
It’s not just rhetoric; Tesla is making multibillion-dollar investments to develop a robotaxi business, including starting volume production of its signature robotaxi vehicle, the Cybercab, in April, and building a lithium iron phosphate (LFP) battery factory in Nevada, in part to provide batteries for the Cybercab.
Musk said at the 2025 annual shareholder meeting that “the pace at which we receive regulatory approval will roughly match the pace of Cybercab production,” but with Cybercab production increasing imminently and Tesla so far failing to expand its unattended robotaxi network beyond a few cars in a limited area of Austin, Tesla risks tying up capital and cash unnecessarily.