Tesla (NASDAQ: TSLA) shares are going to have to do a lot to justify an eye-watering valuation, but its Cybercabs might be the answer. Driverless vehicles are already on roads on both sides of the Atlantic. And based on the last few days at least, the autonomous driving revolution could be hotting up.
Let’s take a look at what’s been an interesting October for Tesla – and whether investors might want to buy the shares before they go into orbit.
On the road
While driverless cars have been promised for a long time, they have taken a lot longer than some of the predictions expected. That could be changing in 2026.
In Tesla’s case, there are now 300 Cybercabs on the road in Austin, Texas. They only got onto the road a month ago, and now there are hundreds of them!
These cars, which have no wheel, no accelerator, no brake pedal and no mirrors, navigate from A to B via cameras rather than radar and lasers. This unique design approach could allow Cybercabs to drive themselves anywhere and everywhere, a possible advantage over competitors.
Speaking of competition, other companies are in the midst of similar rollouts. Waymo (a subsidiary of Alphabet) has its cars taking passengers in a host of American cities and has even started taking a few rides in London.
Uber, meanwhile, has just started testing driverless rides in Manchester (albeit no passengers yet). I was especially interested to see a second British city get the nod for these type of cars. This tells me the regulatory hurdles – a potentially massive obstacle for robotically-driven vehicles – might be getting clearance too.
Shooting up
What could the impact of the driverless cars revolution be? It’s a tricky question to answer, partly because predictions are all over the place.
One study by Goldman Sachs expects the robotaxi market to be worth $400bn by 2035. That’s already dwarfed by Tesla’s market value at around $1.4trn. Seeing as the American firm is one of only many players in this arena, it suggests the Tesla share price might not be shooting up on the back of this new technology.
On the other hand, we have bullish forecasts that predict the market for autonomous vehicles (not just taxis) to be in the region of $42trn by 2034. If true, this might be one of the scenarios where Tesla justifies its (frankly outrageous) price-to-earnings ratio of 337.
Overall? It’s going to be a fascinating few years where we find out whether robotaxis become a normal sight. If they do, then Tesla shares might look like a good investment today. I think they’re worth considering.
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John Fieldsend owns shares in Tesla.
