The Future Fund Managing Partner, Gary Black, cautioned investors on Tuesday against Tesla Inc.’s (NASDAQ:TSLA) robotaxi valuations that project share prices of $2,000 or higher, arguing that such forecasts ignore market realities and competition.
What Happened: Black criticized supply-based approaches that assume Tesla will capture nearly all ride-hailing business from Uber Technologies Inc. (NYSE:UBER) and Lyft Inc. (NASDAQ:LYFT), noting that even if Tesla captured the entire profits of Uber and Lyft combined, the impact on its earnings would be minimal—adding $1.50 per share to Tesla’s Earnings Per Share.
“Tesla doesn’t have a first-mover advantage, has no ride-hailing marketing, and hasn’t been approved for a single autonomous deployment license in any state yet,” Black wrote on X, adding that both Uber and Lyft will likely offer fully autonomous rides concurrently with Tesla.
Black’s skepticism extends to Tesla’s upcoming Austin robotaxi launch, which he recently described as an “experiment” rather than a true market test, with only 10-20 vehicles initially deployed.
Why It Matters: Black’s concerns contrast sharply with ARK Invest CEO Cathie Wood‘s bullish $2,600 price target, which values Tesla at over $9 trillion by 2029. Wood views robotaxis as an “$8 trillion to $10 trillion opportunity” that could transform Tesla from a manufacturer to a software company with margins approaching 90%.
Despite recent positive movement after Tesla’s quarterly earnings call, where CEO Elon Musk announced he would “significantly” reduce his time at the Department of Government Efficiency, Black maintains that regulatory realities will prevent Tesla from dominating the autonomous ride-hailing market.
“Despite Tesla’s fleet, data, and compute advantages,” Black wrote, “regulators will ensure that others are approved soon after. And Tesla’s lack of marketing skills remains its Achilles heel.”
Benzinga Edge’s Stock Rankings indicate that while Tesla faces a short- to long-term negative price trend, it still outperforms Lucid Group Inc. (NASDAQ:LCID), Rivian Automotive Inc. (NASDAQ:RIVN), and Nio Inc. (NYSE:NIO) in terms of momentum. Sign up for more insights.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
