Tesla is poised to make significant advancements in the domain of autonomous vehicles in the upcoming years, as noted by analysts from Morgan Stanley. They anticipate that the company will introduce an unsupervised autonomous vehicle fleet in select urban areas likely next year. The electric vehicle pioneer has recently showcased prototypes of a two-seat vehicle named "Cybercab" and a larger 20-person vehicle called "Robovan.", signaling its commitment to innovation in shared mobility solutions. Following a thorough review of Tesla's operational strategy in mobility, or robotaxi services, Morgan Stanley has adjusted its price target for Tesla stock upward, now setting it at $430, an increase from the previous $400.
This adjustment reflects expectations that Tesla's mobility segment could yield around $90 per share within the next few years, further establishing the company as a leading force in the electric vehicle market. The firm projects that by 2040, Tesla's mobility fleet could comprise 7.5 million vehicles, generating a revenue of approximately $1.46 per passenger mile.
For comparison, Alphabet’s Waymo operates its service at $2.40 per mile, a metric that aligns closely with Uber's gross bookings in the U.S. While Morgan Stanley projects an initial rollout of Tesla’s unsupervised autonomous fleet by 2026, they clarify that mass deployment of these vehicles is not expected before 2030.
The potential reassessment of self-driving regulations under the upcoming Trump administration adds a layer of complexity to the commercialization timeline Tesla faces, especially regarding technology validation, extensive testing, and the necessary permitting processes. Looking towards the future, the Biden administration is anticipated to take office on January 20, and its policies may influence the trajectory of self-driving vehicle deployment nationally.
By 2030, Morgan Stanley estimates that U.S. ridesharing miles will reach approximately 5 billion trips, projecting that Tesla's mobility services could account for roughly 1.4% of all rides in the United States, reflecting a slow but steady growth in this sector. Tesla's robotaxi service is expected to start with operations at 8 hours a day, eventually increasing to 12 hours of daily operation.
Additionally, these robotaxi trips are expected to encompass goods and parcel deliveries, demonstrating Tesla's ambition to diversify its service offerings. Morgan Stanley has emphasized the importance of converting vehicle ownership to a subscription model that generates recurring revenue for Tesla—a vision that has shown some early signs of success.
Recent technological improvements in artificial intelligence and autonomous vehicle systems, coupled with CEO Elon Musk’s influential position within the incoming administration, are also seen as catalysts for boosting investor interest in Tesla's expansive potential to accumulate over 1 billion miles traveled per day via its worldwide vehicle fleet by the year 2030. Moreover, the brokerage has increased its bull case valuation for Tesla from $600 to $800, while its bear case has also seen a modest rise from $170 to $200, reflecting the stock's volatile nature amid market fluctuations.
Morgan Stanley believes that as we advance towards 2025 and beyond, the total addressable market for Tesla will broaden considerably, unlocking new avenues and potential revenue streams that may not yet be represented in existing financial models used by investors and analysts..