Tesla earns money by selling electric vehicles, but 86% of its income could soon come from this instead
Cathe Wood’s ARK investment management provides a major change in Tesla’s activities.
Tesla (Tsla 7.21%)) is one of the world’s largest manufacturers in electric vehicles (electric vehicles), but growing competition slowly stretches its market share. EV sales are still the main engine of Tesla’s financial results, but CEO Elon Musk is trying to enter the company in the future by directing its resources in new products such as autonomous vehicles and robotics.
Ark Investment Management, which was founded by the seasoned technological investor Cathie Wood, predicts that autonomous vehicles will transform the economy of Tesla. In fact, ARK thinks that 86% of the company’s profits will come from autonomous robotaxis by 2029, paving the way for a stock market of $ 2,600. It would be an increase of 615% compared to the place where Tesla shares are negotiated today.
To what extent are Ark’s forecasts realistic? Let’s dive.
Image source: Tesla.
Tesla electric vehicle activities
To respond to the upward forecasts of Ark 2029, Tesla will have to go from the sale of electric vehicles of passengers to the sale of autonomous Robotaxis, and it will also have to build new services such as an autonomous carpooling network.
Unfortunately, Tesla currently operates from a position of weakness, which forced this change earlier than the company might not wanted. After all, government regulators did not approve of Tesla’s complete self-deputy software for unleashed use anywhere In the United States, which is a huge barrier to the success of its next Robotaxi Cybercab.
Tesla delivered 1.79 million electric vehicles of passengers in 2024, which was down 1% compared to the previous year, marking the first annual decline since the launch of its flagship model in 2011. This led to a 14% drop in Tesla income and a collapse of 31% of its profit per share (BPA) during the same period, which is at least alarming.
A rapid increase in competition is a key reason for Tesla misfortunes. Low -cost electric vehicle producers like China Byd make serious breakthroughs on some of the largest markets in Tesla. Tesla sales fell 40% across Europe in July, despite registration by EV escalation 33% overall. Byd, on the other hand, experienced a huge increase of 225% of sales in the region.
In simple terms, Tesla quickly loses market share in the EV space of passengers. The company is launching a low cost EV in order to compete, but production has just started, which will probably not be a factor before next year at the earliest.
86% of Tesla’s income could soon come from autonomous robotaxis
Elon Musk makes a big bet on autonomous ruin. Cybercab, which will enter mass production in 2026, will work entirely on Tesla’s FSD software, it is therefore designed to operate without any human intervention. In theory, this means that it can transport passengers and even small commercial charges at all hours of the day, creating a new source of lucrative income for the company.
The scale of this company will be with challenges. I mentioned that the FSD is not approved for not supervised use in the United States for the moment, but Tesla will also have to compete with tension giants like Uber technologieswhich has already teamed up with 20 other companies in the autonomous driving space. About 180 million people already use Uber each month, it is therefore much better placed to dominate the autonomous carpooling industry compared to Tesla, which must build an entire network from zero.
However, Ark thinks that Tesla will eventually make it work. Its forecasts suggest that the company will generate $ 1.2 dollars in annual income by 2029, with 63% ($ 756 billion) from its Robotaxi platform alone. ARK says that this could result in $ 440 million in profits before interest, taxes, depreciation and amortization (EBITDA), with 86% attributable to Robotaxi because of its high beneficiary margins – human drivers are the highest cost in existing drawing networks, but Robotaxi will not need it.
Do not rush yet to buy Tesla actions
In my opinion, Ark’s predictions are too ambitious. Wall Street thinks Tesla will generate around $ 93 billion in revenue in 2025 (according to Yahoo! finances), so this figure will have to grow almost 1,200% over the next four years to respond to Ark’s forecasts of $ 1.2 Billion of dollars – pulled by a new Robotaxi product that has not even fired.
Tesla’s assessment is another problem. Its stock is traded to a price / profit ratio (p / e) of 209, which makes it almost seven times more expensive than the Nasdaq-100 Technological index – which is negotiated with a P / E ratio of 31.6. Remember that Tesla’s income is currently contractionWhich makes its premium evaluation even more difficult to justify.
Therefore, I hesitate to join the idea that Tesla action could increase by 615% in the next four years to reach the ARK course target of $ 2,600. It may be possible that the company’s Robotaxi platform is as successful as the Ark predicts, but I think it is unlikely in such a short time. After all, Elon Musk has promised unattended autonomous cars in the past 10 years, and Tesla always has not delivered.
