Key Points
Tesla (NASDAQ: TSLA) stock is on the decline. Since 2026, shares have lost more than 15% of their value. The company recently posted declining automotive sales for the third year in a row, while competition in the electric vehicle (EV) space continues to rise sharply.
Still, the company has a market cap north of $1 trillion. That size gives the company something few competitors can match: access to capital. Few companies have the ability to raise billions of dollars in fresh capital as quickly as Tesla. This is partially why the company can target massive growth opportunities that few corporations on Earth could ever dream of going after. In fact, there’s one market in particular that could add more than $1 trillion to Tesla’s current market cap. If Tesla succeeds in this market, its current troubles will become ancient history.
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1 opportunity for Tesla to add $1 trillion to its market cap
Ridesharing is already a giant business. Uber Technologies has a market cap of around $150 billion. Some forecasts believe the global rideshare market will exceed $650 billion by 2034. But those estimates usually just include the conventional rideshare market. By the end of the decade, there may be a brand new opportunity far bigger than the conventional rideshare market: robotaxis.
Of course, for robotaxis to exist, self-driving technology would need to reach a level of maturity that currently does not exist. But according to a new report from McKinsey & Co., the future has nearly arrived:
Autonomous vehicles are on the on-ramp to full deployment. Recent years have seen the first Level 3 (L3) vehicle releases, more than 700,000 fully autonomous robo-taxi rides per week, and the first driverless demos for autonomous trucks. This ramp-up is global: Europe has been home to more than 35 autonomous-vehicle pilots to date, and the United States and China each see more than 450,000 and 250,000 commercial rides per week, respectively.
McKinsey & Co. predicts that robotaxis will be the first real-world application of self-driving vehicles, not private cars. The robotaxi market, the firm believes, will reach global scale by 2030.
Image source: Tesla.
It’s no secret that Tesla has been investing heavily in artificial intelligence (AI) and autonomy in order to take this market by force. The company even discontinued production of the Model S and Model X, potentially to clear more factory space and capital for its Cybercab vehicle. That vehicle will have no steering wheel. It also won’t have any pedals. Tesla is currently retooling its production lines to make the Cybercab reality, with a target to begin production this year, eventually scaling to a production speed of one Cybercab produced every 10 seconds.
How big could the robotaxi market be for Tesla? Cathie Wood — the CEO of Ark Invest and vocal Tesla investor — thinks Tesla will eventually command a leading share of what she believes will be a $5 trillion to $10 trillion market globally. Wedbush analyst Dan Ives believes robotaxis and autonomous driving will add $1 trillion to Tesla’s market cap.
If you’re a believer in Tesla’s autonomy vision, shares remain a strong long-term buy despite the current $1.1 trillion valuation.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
