Investor's Corner
Tesla Robotaxi, Autonomy, and Insurance drive new price target from ARK Invest
ARK Invest has upgraded its price target and outlook for Tesla through 2025, projecting massive gains as the automaker continues to dominate the electric vehicle market. ARK analysts now believe that Tesla’s outlook is even better than before, boosting its price target from $1,400 in 2024 to $3,000 in 2025. The new figures depend on Tesla’s rollout of Robotaxi, a fully-autonomous vehicle, and its expanding insurance initiative.
ARK released a new report on March 19th that outlined the firm’s real-world expectations for Tesla. Already holding the reputation as one of Tesla’s biggest bulls, ARK revised its price target by pushing its forecast forward by one year from 2024 to 2025. Also, ARK became even more bullish by boosting its outlook from $1,400 in 2024 to $3,000 in 2025. ARK wrote:
“Last year, ARK estimated that in 2024 Tesla’s share price would hit $7,000 per share, or $1,400 adjusted for its five for one stock split. Based on our updated research, we now estimate that it could approach $3,000 in 2025.”
Credit: ARK Invest
The key updates ARK made to its model were that it refined the estimates for Tesla’s capital efficiency, the addition of Tesla’s Insurance initiative, which is set to open in more U.S. states shortly, new assumptions for the possible rollout of Robotaxi, and the probability that the automaker successfully achieves fully autonomous capabilities within the next five years.
Production Expansion
ARK’s general outlook on Tesla remains extremely bullish. The firm wrote that it believes the company can expand its production and sales capacities between 5 and 10 million vehicles by 2025. The additional year of growth capability due to the newly-revised price target, along with several other metrics, has ARK projecting massive sales figures within four years. Coming off its biggest year in terms of sales, where Tesla managed to deliver 499,650 cars in 2020, this would roughly project a between 10x and 20x growth in four years. It doesn’t seem far-fetched as Tesla continues to roll out more efficient production methods thanks to manufacturing efficiencies. Additionally, the supplemental production figures from Giga Texas and Giga Berlin also indicate that Tesla will be in prime position to expand its production metrics considerably within the next several years.
Credit: ARK Invest
Currently, Tesla projects each of its three active production facilities to produce approximately 1,050,000 vehicles per year.
Tesla Insurance
Meanwhile, Tesla’s Insurance program has been added to ARK’s new projection. While the in-house insurance initiative is only currently available in California, documents show that Tesla drivers in several other U.S. states are set to have it available to them. Tesla’s “better-than-average” safety profiles, thanks to an increased focus on passenger safety, Tesla has the ability to use real-time data to offer insurance in its vehicles, ARK said. This could increase pricing dynamics and lower customer acquisition costs, thus increasing margins. “In our bull case, ARK estimates that, as robotaxis ramp, Tesla’s insurance revenues will be incorporated into a platform fee. Insurance boosts our price target by roughly $60 in 2025,” Tasha Keeney of ARK also wrote.
Tesla Robotaxi and Fully-Autonomous Vehicles
Tesla’s human-driven and fully-autonomous ride-hailing services also provided a substantial boost to ARK’s general outlook for 2025. “In our bear case example, ride-hail could add an additional $20 billion to Tesla’s operating profit by 2025, increasing our price target by about $500,” Keeney said. The rollout of a fully-autonomous service could be preceded by a human-driven service, providing a highly-profitable recurring revenue stream and limiting the downside of the possible failure of a fully-autonomous service.
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The possibility of a fully-autonomous vehicle coming from Tesla is around 50% for 2025, increasing from the 30% projection ARK held for 2024. Tesla’s increased focus on Neural Networks along with a quickly-growing vehicle fleet gives the automaker the possibility to scale an accurate and effective Robotaxi service, opening up the door for additional cash flow. ARK added that:
“If 60% of its vehicles equipped with Autopilot were to serve as robotaxis, Tesla could generate an additional $160 billion in EBITDA in 2025. In our bull case, ride-hail would account for the majority of Tesla’s enterprise value in 2025.”
ARK states that its bearish outlook shows Tesla shares could be worth around $1,500. Meanwhile, its bull case projects $4,000 per share. Interestingly, ARK’s projections do not model Tesla’s energy storage or solar business, nor did it include the recent $1.5 billion bitcoin investment, which has given Tesla significant profitability.
ARK’s full report is available here.
Disclosure: Joey Klender is a TSLA Shareholder.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
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