Tesla (NASDAQ: TSLA) is valued at a highly speculative price-to-earnings multiple of 192, significantly higher than traditional automakers like Ford and General Motors, which trade at single-digit multiples. The valuation primarily reflects investor expectations surrounding Tesla’s upcoming robotaxi service scheduled for launch on June 12, 2023, in Austin.
Analysts predict that Tesla’s robotaxi business, including the planned mass production of its dedicated robotaxi vehicle, the Cybercab, could generate substantial recurring revenue. According to Ark Invest, a notable investment firm, 88% of Tesla’s value may derive from robotaxis by 2029, with the remaining 9% from electric vehicles (EVs).
Despite the potential for high returns, investors should note that the robotaxi service is still in its initial stages, adding an element of risk. Tesla’s balance sheet is robust, with $37 billion in cash against $7.5 billion in debt, indicating a net cash position of $29.5 billion, which helps mitigate some speculative risks associated with its growth outlook.
