Tesla Robotaxi Hopes Dashed By Uber, Lyft: No Fast Lane To Profits, Warns Investor Gary Black
Tesla investor Gary Black warns that the company may not profit from its robotaxi service for several years due to competition with established ride-hailing services like Uber and Lyft. Despite Tesla's progress in testing its service and plans to launch in Austin, Black emphasizes the challenges ahead. However, he remains optimistic about Tesla's future, predicting increased EV adoption and a rise in deliveries by 2030, with a price target of $310 for Tesla stock. Tesla shares rose 6.8% to $318.53 recently.
Tesla, Inc. TSLA investor Gary Black recently took to X to share his view on several critical challenges facing the electric car company as it aims to launch an autonomous ride-hailing network.
What To Know: Black, a managing partner at Future Fund LLC, doesn’t expect Tesla to make money with its robotaxi service for several years. After all, it must still create a network of riders and compete with established rail-hailing services like Uber Technologies, Inc. UBER and Lyft, Inc. LYFT, he says.
"You are missing that $TSLA can't just create a network of 24M active riders,” Black tweeted on May 10. “Assuming TSLA can get autonomous ride hailing deployment licenses in every state, it still must compete with $Uber and $Lyft who will offer much cheaper driverless options themselves. With three players all fighting for riders TSLA may not make money on ride hailing for years.”
While Tesla is making tangible progress in testing its ride-hailing service internally in cities like Austin, Texas and San Francisco and applying for key permits in California, road-to-market dominance is far from assured.
The Road Ahead: Tesla is forging ahead and is set to launch its robotaxi service in Austin in June. The company is also working to deploy driverless robotaxis at Los Angeles International Airport, but it still needs additional approvals from the California Public Utilities Commission and the Department of Motor Vehicles.
Tesla’s official account on Sunday quoted a video on X that showcased a vehicle navigating through traffic. The model used supervised FSD around LAX airport.
“LAX is no problem for FSD Supervised,” the EV giant said in the post. The post was also reposted by Tesla CEO Elon Musk.
Bullish: Despite the criticism, Black remains bullish on Tesla. He said that the EV giant could stand to gain from increased EV adoption globally.
“We own $TSLA because as global EV adoption increases from its current 20% to 50% by 2030, TSLA deliveries should increase from 1.7M in 2025 to 5.0M by 2030,” he shared in a separate social media post.
Black also sees autonomous driving boosting Tesla's sales and set a $310 price target on Tesla stock.
“We expect unsupervised autonomy to sell more Teslas and increase the FSD take rate from its current 15% to 33%.” the investor said.
Price Action: Tesla shares were up 6.8% at $318.53 on Monday, according to data from Benzinga Pro.
