Tesla Robotaxi Rollout Poised to Skyrocket Valuation, Analyst Suggests

Tesla's Q2 2025 earnings call revealed significant progress and future ambitions, particularly concerning its Robotaxi service. CEO Elon Musk highlighted the ongoing expansion of the Robotaxi pilot program in Austin, with plans to extend its reach to the Bay Area, Arizona, and Florida in the coming months. Musk expressed optimism that Robotaxi services could be available in half of the U.S. population by year-end, pending regulatory approvals.

Robotaxi Expansion and Valuation Potential

Analysts are closely watching Tesla's execution of its Robotaxi strategy, with some suggesting that successful implementation could lead to a valuation significantly higher than current levels. The company reported over 7,000 driverless miles in Austin and aims to exponentially grow its Robotaxi fleet. The Cybercab is being designed for maximum comfort, safety, and minimal cost per mile.

• Key Takeaways:Robotaxi pilot launched in Austin, with expansion planned for multiple states.Potential for Robotaxi service to cover half the U.S. population by year-end.Analyst believe successful Robotaxi execution could dramatically increase Tesla's valuation.Focus on safety and cost-efficiency for the Cybercab.

Full Self-Driving (FSD) Advancements and Market Outlook

Musk also touched upon the advancements in Tesla's Full Self-Driving (FSD) software, noting the potential to significantly increase its parameter count. He anticipates regulatory approvals for FSD in Europe, which could boost vehicle deliveries. The company is prioritizing the rollout of Unsupervised FSD to newer hardware (HW4) before addressing older hardware (HW3).

Optimus and Tesla Energy Growth

The earnings call also provided updates on Tesla's humanoid robot, Optimus, with the third generation expected to be "exquisite." Musk projected a production rate of 100,000 Optimus robots per month within five years. Tesla Energy also showed strong performance, with the company forecasting continued growth and the launch of a third Megafactory in Houston next year.

Financial Performance and Future Plans

Tesla reported total revenues of $22.5 billion for Q2 2025, with automotive revenues at $16.7 billion and a GAAP gross margin of 17.2%. The company also mentioned the start of production for more affordable car models in the first half of the year, with volume production slated for the latter half. Musk also alluded to working on a new Master Plan, emphasizing Tesla's potential to change the world.