I keep seeing $TSLA price targets that incorporate Robotaxi valuations of $2,000/share, $3,000/share or more. Most erroneously assume TSLA somehow takes 99% of the ride-hailing business away from UBER and LYFT once TSLA is approved for unsupervised autonomy and is awarded robotaxi licenses in every state. Most of these analyses take a supply-based approach (# Cybercab fleet x days/year x hours/day x trips/hour x miles/trip x $/mile x TSLA take rate), without considering the demand side of the equation. Even if $TSLA took 100% of UBER and LYFT profits it would only add $1.50/share to TSLA EPS.
One can’t assume TSLA takes 100% share when TSLA doesn’t have a first-mover advantage, has no ride-hailing marketing, and hasn’t been approved for a single autonomous deployment license in any state yet (although TX is likely coming). We believe both Uber and Lyft will offer fully autonomous rides with no driver at about the same time as TSLA since they already have national platforms and infrastructure, and will employ other manufacturers’ self-driving cars approved for unsupervised autonomy.
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