Tesla Likely to Launch Robotaxi Service in Next 5 Years, May Account for 90% of Future Profit

Ark Invest's prediction for Tesla in 2029

ARK Invest

Tesla is on the verge of its Robotaxi announcement event on 8/8, and major investors like Ark Invest are examining and refreshing their bull case scenarios.

Robotaxi as a Focus

Ark Invest sees Robotaxi as a focus of Tesla’s ongoing business and sees Tesla’s autonomous ride-hailing revenue to net nearly $1 trillion in 2029. In comparison, they estimate Tesla’s vehicle sales to account for $0.4 trillion in revenue. With this bull case, Ark Invest also sees Tesla’s share price soaring to $3,100 by 2029. Ark Invest’s bear case sees the share price moving to $2,000 and robotaxi netting $0.63 billion in revenue.

Ark Invest gives Tesla a 58% chance of launching its robotaxi service in 2025, and a 38% chance in 2026. It’s clear that Tesla’s future lies in operating a fleet of autonomous vehicles and the question is just when it will happen. Given FSD’s massive improvements between FSD V11 and FSD V12, there is a possibility of Tesla meeting these estimates, although a lot depends on how fast improvements will continue to come. While FSD V12 is impressive, it’s still a long way from a true autonomous vehicle.

Rate of Improvement

Miles driven by Tesla FSD versus autonomous competitors

ARK Invest

Ark’s case is focused on the fact that FSD’s rapid improvement will continue, and a lot of that may be determined with the next few releases, including FSD 12.4.1, v12.5, and v12.6. When comparing Tesla to autonomous vehicles, Tesla has a drastic lead in miles driven, in fact, it’s so large that you can barely even see Tesla’s competitors. Tesla is at 1.3 billion miles driven with FSD, while the closest competitors are just reaching 15 million autonomous miles driven. While there’s a drastic difference in capabilities between Tesla’s FSD and autonomous vehicles such as Google’s Waymo, Tesla has the ability to gather data 86 times quicker.

Training data is key to building autonomous vehicles, and Tesla is currently the king of vehicle-related data.

Services Company

We previously wrote about whether Tesla’s future will be as a car company or a services company – and major investors such as Ark Invest and Morgan Stanley see Tesla’s AI services as a major driver of business in the future, and the focus of future revenue and profits.

Robotaxi, as both a service and as a physical product, has the opportunity to shake up markets in a unique way, providing quick, clean, and safe transportation between local destinations in urban areas, which could quickly outcompete traditional services like taxis, and tech competitors like Uber or Lyft. The market for robotaxi is untapped and massive, but Tesla isn’t the only one chasing the goal.

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Tesla Now Lets You Pick the Battery Supplier in the Model 3 and Model Y Long Range Models

Not a Tesla App

Tesla has begun providing different Model 3 and Model Y Long Range variants for its customers – dividing the two variants between those who are eligible for the $7,500 Federal EV Tax Credit, and those who are not eligible.

Eligible vs Non-Eligible Customers

Tesla is making two versions of their Long Range models of the Model 3 and Model Y available to customers in the U.S. One of them qualifies for the tax rebate, and the other doesn’t. However, there are some underlying differences between the two models customers should know.

Customers who claim they are eligible for the tax credit will be provided a VIN for a vehicle that qualifies for the EV Tax Credit. Vehicles that qualify for the Tax Credit have their battery and its cells manufactured in North America.

Customers who aren’t eligible or don’t opt to use the tax credit will get a VIN that doesn’t qualify for the federal credit. Customers who aren’t eligible for the federal rebate may still be eligible for local or state rebates, and these cars should be eligible for those specific rebates.

Panasonic vs LG Batteries

So what’s the difference between the two variants? It essentially comes down to the batteries and where they’re produced. The Model 3 and Model Y cars that are eligible for the tax credit will contain Panasonic batteries, which are produced in the U.S., while the cars not eligible for the rebate will include LG batteries.

They’re both non-LFP, 2170 cells, and while there isn’t a huge difference on the surface between the battery cells since they offer similar “regular” charging speeds and range, one does tend to be a little better. The LG batteries have been known to not charge as fast at level 3 chargers – which include Superchargers.

We recommend getting the vehicle that qualifies for the rebate that includes Panasonic batteries, even if you’re not planning to take advantage of the federal rebate. Besides getting a better battery, it leaves you open to receiving the tax rebate if circumstances change later in the year. It’s possible Tesla may offer a discount on the LG battery-powered model in the future, but at this time with them being the same cost, the Panasonic version makes more sense.

The Performance variant of the Model 3 and Model Y also comes with the Panasonic batteries. The LFP pack in the Rear-Wheel Drive variants of either vehicle also charge faster than the LG batteries.

The video below shows some of the speed differences between the battery packs.

How to View Cars

To view the vehicles with their specific battery packs, you’ll need to use Tesla’s inventory system. Simply go to the Inventory section of Tesla’s site, and then enable (Panasonic batteries) or disable (LG batteries) the Tax Credit Eligible Vehicles toggle on Tesla’s site.

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Tesla Issues Two Physical Recalls for the Cybertruck

Not a Tesla App

Tesla has issued two voluntary recalls for the Cybertruck, both requiring physical servicing.

Wiper Motor Recall

The first recall is concerning the wiper motor, which has a build defect. Approximately 2% of delivered trucks (11,688 vehicles) have a malfunctioning gate driver component and will require a replacement. The full assembly will be replaced.

We’re expecting this replacement to be fixable by a Mobile Service Technician, as the refit of the motor assembly should be doable by just one individual, as per the Cybertruck Service Manual.

The NHTSA recall can be viewed here.

Sail Trim Recall

The Cybertruck’s unique sails (the triangular panel that connects the top of the truck to the back of the truck bed) have some uniquely attached trim pieces – and some of them are reportedly failing. Tesla has issued a recall for these sail trim pieces as well, which can become detached at speed due to wind catching the front edge of the trim piece, and lifting it away.

Tesla will replace or rework the cosmetic trim piece along the exterior of the sails, to ensure sufficient adhesion. This will include the application of a new adhesion promotor and pressure-sensitive tape.

We’re expecting this replacement to also be fixable by a Mobile Service Technician, as some Cybertruck owners on X have previously had the same issue fixed by mobile service.

This NHTSA recall can be viewed here.

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