Tesla’s shares jumps 6% as robotaxi service launch pushes valuation above $1 trillion
Tesla Inc’s (NASDAQ: TSLA) shares rose by 6% on Monday, lifting the electric carmaker’s market value above $1 trillion for the first time since February.
The gain follows the quiet debut of Tesla’s long-awaited robotaxi service in Austin, Texas, signalling a potentially transformative shift in urban mobility.
Unlike the flamboyant product launches Tesla CEO Elon Musk is known for, the robotaxi rollout was low-key.
A small fleet of 10 to 20 self-driving Model Ys operates within a geofenced area, transporting a select group of investors and social media influencers.
Their videos showed uneventful rides with the vehicles obeying traffic laws and parking without incident, occasionally hesitating at commands.
This measured approach comes after a difficult year for Musk and Tesla, marked by a dip in sales, public controversies, and erratic political engagements.
The subdued launch suggests a strategic pivot: Musk appears to be focusing on executing critical technological milestones with precision rather than spectacle.
However, competition is fierce. Alphabet’s Waymo and Amazon’s Zoox already operate robotaxi services in Austin, with Waymo partnering with Uber to offer rides.
Tesla’s system is still in its infancy. While some rides were impressively smooth, others exposed imperfections, such as cars pausing mid-road on commands to pull over.
The service currently charges a flat fee of $4.20 per ride, with no announced plans for pricing models or wider availability.
The stakes are high. Tesla must prove it can succeed where others have faltered. General Motors’ Cruise halted operations following a safety incident, and Uber exited the driverless car space after a fatal crash in 2018.
Although no public timeline exists for a full-scale launch, Musk has expressed ambitions to expand rapidly and into multiple U.S. cities.
Analysts at Wedbush estimate that autonomous driving technology could boost Tesla’s valuation to $2 trillion within 18 months if Musk successfully navigates the complexities of robotaxi deployment.
The tech gurs at UBS aren't so sure. they point out that much of Tesla’s current valuation already prices in the promise of a robotaxi empire.
Their sum-of-the-parts valuation estimates Tesla’s core electric vehicle business at $25 per share and its solar and battery divisions at $19. The remainder, about $180 per share, is tied to Musk’s other ventures, including robotaxis, humanoid robots, and speculative energy projects.
Scaling robotaxis from a handful to millions will require overcoming regulatory hurdles, expanding data infrastructure, and convincing a wary public to trust driverless cars. History shows that autonomous driving companies have struggled to move beyond pilot programmes despite years of testing.
Tesla now trades at nearly 90 times projected earnings for 2026, placing it among the most expensive high-growth stocks.
UBS advises investors to temper expectations, warning of significant risks ahead despite the optimism around Musk’s vision.
