Tesla robotaxi launch fails to impress one heavyweight tech team

Over the weekend, Tesla Inc (NASDAQ:TSLA) slipped its first fully autonomous ride-hail service onto Austin’s streets with barely a fanfare: a handful of geofenced vehicles, safety monitors on board and invited riders only.

It’s a cautious debut that echoes the limited roll-outs from Waymo and Cruise, yet investors had been banking on something more spectacular.

UBS reckons that all the hype around a robotaxi empire is already baked into today’s US$322 share price and is sticking with its 'sell' rating.

Crunching the numbers, UBS builds a best-case scenario in which Tesla fields some 2.3 million robotaxis by 2040, generating about US$200 billion in annual turnover.

That kind of scale would dwarf the sales of most mass-market automakers and transform every smartphone into an on-demand chauffeur.

Yet even with such an optimistic forecast, the bank pegs the robotaxi operation at just US$99 of value per share, up from US$64 in its last update, but far short of justifying the current multiple.

Digging deeper, UBS values Tesla’s core electric-vehicle business at around US$25 a share and its solar and battery operations at another US$19.

That still leaves roughly US$180 per share hanging on Elon Musk’s “other” bets (humanoid robots, energy-storage breakthroughs or yet-to-be-revealed ventures).

In UBS’s sum-of-the-parts model, that residual is lumped into a US$250 billion “Tesla premium”, roughly in line with its two-year average for unspecified optionality.

Pricing in the cautious Austin rollout only underlines how many hurdles lie ahead.

The initial fleet will be small, restricted to a single metro area and reliant on human oversight via teleoperation.

If Tesla hopes to ramp from dozens of cars to millions, it must overcome regulatory scrutiny in every US state, scale its software and data centres to handle real-time traffic across hundreds of cities, and persuade an increasingly safety-conscious public to ride without a driver.

History suggests that’s no small feat: none of the current autonomous services has broken out of pilot mode after half a decade of testing.

All told, UBS’s raised price target of US$215, up from US$190, still leaves more than 30% of today’s share price unexplained by identifiable businesses.

At around 90 times projected 2026 earnings, Tesla trades at the upper end of normal multiples for high-growth disruptors. Given the gap between promise and proof, UBS argues there’s more downside than upside from here.

Tesla’s robotaxi may be motoring onto public roads, but for anyone who bought the stock to chase that future, the journey looks bumpier than the glitzy headlines suggest. At these levels, UBS believes it’s time to step off.

Ahead of the bell, the shares were marked 1.8% higher at $326.