Tesla (NASDAQ: TSLA) is a strange breed of stock. Leaving aside the eyebrow-raising antics of a, shall we say, ‘polarising’ CEO, the Austin-based firm sells cars but doesn’t resemble the other firms that sell cars. 

The electric vehicles (EV) behemoth boasts of an over $1trn market cap. It trades at 180 times earnings when other car firms are in the double or even single digits. 

It’s often said when discussing its elevated share price, but Tesla is a car company priced like a technology company. 

Why is this? Well, part of the stock’s premium comes from it having stolen a march in the EV market. But a larger part is its position at the forefront of potentially revolutionary new technology like self-driving cars and automated robotaxis. This aspect is worth considering for investors, in my view.

And anyone who is enthusiastic about a revolution on the roads will have been paying close attention on 8 August. On that day, the very first Tesla robotaxis began taking public passengers.

Robocar

So, have these robot-driven vehicles been getting on? The cars really are picking up passengers, taking them from A to B, all without a moment of human input. The technology is working and without hiccups, apparently, although the caveats loom large. 

For one, while the car drives itself, a human is sat in the driver’s seat as you take the journey. A backup human driver is necessary from a regulatory standpoint. It is also likely reassuring from a safety standpoint. However, it does undermine the idea of a car that drives itself. 

A second issue is that while the driving seems mostly smooth and competent, the car often makes odd errors like stopping in junctions or taking the wrong lane. These driving errors might seem like wrinkles to be ironed out. The issue is that these robotaxis are only in operation in a single city, so far. The true economic power of self-driving vehicles will only be unleashed when they can drive to any town, city, or village and all the roads between them. 

That there are issues navigating busy roads with presumably lots of analysis and data points does make me question how quickly self-driving cars will be rolled out on a grand scale. In all, I’m looking at this as more of a small step for cars, rather than a giant leap for carkind. 

The answer

To address the original question then: will robotaxis rescue Tesla stock? 

Despite the initial volley of robotaxis not setting Austin, Texas, alight, I’m still confident in the future of this technology. Earnings forecasts suggest a big increase in 2028 and Elon Musk himself has said it will take until the 2030s for driverless tech to have a real impact on the income statement. 

The recent launch of the first batch of this technology can be considered as baby steps. As for buying or selling the shares, I wouldn’t like the lion’s share of my portfolio to be in future-focused growth stocks with such heady valuations. But for anyone bullish about future advancements? This could be a stock to consider.