Robotaxi May Just Opened The Next 'Trillion-dollar Doorway' For Tesla

Investor interest in Tesla's Robotaxi has surged, especially after Tesla launched its first Robotaxi service in Austin, Texas on the 22nd.

Reportedly, the current Robotaxi fleet consists of only 10 vehicles, operating between 6 a.m. and midnight within a certain area. Most importantly, the vehicles are still equipped with safety monitors and remote operators, with a flat fare of $4.20.

On Monday, UBS released a research report stating that if everything goes according to plan (including technology, regulation, network construction, and scaling), this could be a massive market. By 2040, Tesla's Robotaxi network in the U.S. could expand to 2.3 million vehicles, with annual revenue potentially reaching $203 billion, contributing up to $86 billion in after-tax operating profit to the company.

Tesla not only independently develops its Full Self-Driving (FSD) system but also possesses vehicle manufacturing capabilities and an operational platform. This vertically integrated capability makes Tesla the only company currently able to bundle "vehicle + software + network platform" together.

Based on this, UBS assigned a $350 billion valuation to Tesla Network, raising Tesla's target price from $190 to $215. As of the latest update, Tesla's pre-market stock price was $327. Nevertheless, UBS maintained a "sell" rating on Tesla, arguing that while the long-term prospects of Robotaxi are attractive, the market has already priced in these expectations, making Tesla's current valuation "unsustainable."

A $203 Billion Potential Market: Robotaxi as the New Growth Core

UBS's team analyzed Tesla's upcoming Robotaxi service in Austin and built a 15-year business model based on conservative assumptions. The model shows that by 2040, Tesla Network's Robotaxi fleet could reach 2.3 million vehicles, comprising both company-owned and externally "contributed" vehicles.

About 40% of the fleet would be owned by Tesla, while 60% would be purchased by individuals or fleet companies and integrated into the Tesla Network, similar to Airbnb's "host" model. Assuming each vehicle operates 8 hours per day at an average speed of 25 mph, Robotaxis could achieve an annual mileage of 49,000 miles.

UBS estimates that by then, Tesla Network's total annual revenue could reach $203 billion, with $143 billion coming from the company-owned fleet and about $60 billion from contributed vehicles (based on a 30% platform commission). The overall gross margin would be as high as 72%, with a net profit margin of 42%.

Fully Integrated Supply Chain: Tesla Builds an "Autonomous Driving Closed Loop"

UBS's report emphasizes that, compared to competitors like Waymo and Mobileye, Tesla's biggest advantage lies in its vertical integration capabilities. The company not only develops its FSD system independently but also has in-house vehicle manufacturing and an operational platform.

This makes Tesla the only company capable of bundling "vehicle + software + network platform" together. UBS believes this structural advantage allows Tesla to benefit from: Vehicle sales profits, FSD software subscription revenue, and Robotaxi platform commission revenue.

Additionally, Tesla can dynamically adjust supply through its platform mechanism, avoiding resource inefficiencies caused by demand fluctuations.

Cost Breakdown: Robotaxi’s Average Operating Cost at $0.86 per Mile

The report cites data from the New York Taxi and Limousine Commission (TLC) to calculate Robotaxi operating costs in detail. By 2040, Tesla's total cost per mile is estimated at $0.86, consisting of: insurance ($0.30), vehicle depreciation ($0.10), maintenance and cleaning ($0.18), charging costs ($0.12), as well as parking, registration, and other expenses ($0.16).

With a fare of $3 per mile, Robotaxi's unit gross margin would exceed 70%, making the economic model highly attractive.

Profitability and Valuation Analysis

From a financial perspective, UBS expects Tesla Network to remain unprofitable in 2027. However, as the business scales and operational efficiency improves, it could turn profitable by 2030, achieving $86 billion in after-tax operating profit (NOPAT) by 2040, with a gross margin of 72% and an EBIT margin of 55%.

Moreover, the contributed fleet segment, which does not require Tesla to bear vehicle costs and primarily generates revenue from software and platform services, could achieve a staggering 92% profit margin, becoming a major cash flow driver.

In terms of valuation, UBS assigned Tesla Network a $350 billion valuation, equivalent to $99 per share. With Tesla's current stock price at $321.87, this means Robotaxi theoretically accounts for 31% of Tesla's current valuation.

Investor Caution: High Potential but a Long Road Ahead

Although Robotaxi demonstrates immense potential in business model, profitability, and industry disruption, UBS warns investors that Tesla's current valuation already fully reflects these expectations.

Robotaxi is a long-term business requiring technological, regulatory, and consumer adoption milestones. Until the technology is widely deployed, the market's high valuation may be difficult to sustain.

Therefore, UBS advises investors to carefully weigh "long-term growth potential" against "current performance realities" when evaluating Tesla, avoiding emotionally driven investments at peak valuations.