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Analysts suggest that Tesla's forthcoming $25,000 car may be the real driver of stock growth, potentially overshadowing the much-discussed Robotaxi by capturing a significant share of the compact car market.
Robotaxi and FSD Seen as Stock Boosters
A lot of people think the Robotaxi and Tesla's planned release of a fully autonomous Full Self-Driving package will be the two greatest things that will drive stock price growth.
It would appear that there are a lot of reasons to be optimistic about the stock, including the possibility of owners operating a Robotaxi fleet and making money even while they sleep, the possibility of other manufacturers licensing the suite, and a host of other positive developments.
$25K Tesla Car Sparks Bigger Hype
One analyst, though, claims that's not his main concern and that something else is even more intriguing.
The $25,000 car, according to Gary Black of The Future Fund, is the greater trigger for Tesla stock.
Affordable Tesla Aims to Disrupt Compact Market
Why? Because if Tesla can corner the inexpensive compact car market and unseat competitors like the Toyota Corolla—the only car that came in second place behind the Model Y in terms of sales last year—the company's stock will soar.
Schwab Network interviewed Black, and Black explained:
My $270 [price target] just includes a take rate on FSD. I include nothing for Robotaxi. I have a big energy ramp-up over the next ten years and a big services ramp-up. But the auto business is the big chunk of that $270. Look, you can be excited about owning $TSLA, and the most important thing to me is the $25,000 to $30,000 car…This is very reminiscent of 2020, when they introduced the Model Y. The Model Y was a new category…the bears said it was just a big Model 3. That is not true because you get a whole new TAM going into a new category…Once you have a compact, you’re bringing the Tesla brand, and its performance, and its safety record, and all the things people love about Tesla…and you’re putting it in the compact category. They’re going to take a lot of market share by doing that.
Analysts Weigh in on Robotaxi vs. $25K Tesla
While this is an intriguing perspective on the stock, Teslarati shares that it does not appear to be an apples-to-apples comparison to compare the breakthrough that Robotaxi and building a fully autonomous driving suite would be to merely release a new vehicle in a competitive field.
Can Tesla's Compact Car Outshine the Robotaxi?
Since no one now sells a completely driverless vehicle, bringing one to market would open up a lot of new potential for Tesla stock—possibly even more so than selling a cheap sedan.
But that doesn't diminish the potential excitement that a $25,000 Tesla may generate
