Tesla’s market cap sits somewhere between $370 billion and $1.6 trillion, depending on who’s talking. The numbers change based on whether people see the company as just another EV maker or a tech company betting its future on robotaxis and humanoid robots.

According to Bloomberg, analysts’ 12-month targets on Tesla’s stock range from $115 to $500, a split so wide it’s nearly unmatched in the S&P 500. That gap is where the argument begins.

Nicholas Colas, co-founder of DataTrek Research, says most of the stock price is tied to Tesla’s unproven ambitions. The present-day business isn’t enough to justify the price. What drives the price, he says, is the belief in what Tesla might become. And that belief is tightly linked to Elon Musk, who has more control over his company’s share price than probably any other CEO alive.

Robotaxis test Elon Musk’s promises

Elon says the future is about full automation. The next checkpoint in that vision is the robotaxi launch planned for June 22 in Austin. It’s expected to run a small fleet of Model Y vehicles. But his track record for delivering on timelines is rocky. Musk once even called himself “the boy who cried FSD.”

Investors following him don’t seem to care. Herbert Ong, who runs a Tesla-focused YouTube channel with over 100,000 followers, says, “The car business is really a sideshow.” Musk agrees. He said last year, “If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company.”

The Full Self-Driving software Elon is pushing is still not fully autonomous. It needs human oversight. The system uses cameras, not lidar or radar, which Musk claims is cheaper and easier to scale. Critics say the opposite. They argue that relying on cameras is riskier, especially under poor lighting or bad weather. The US National Highway Traffic Safety Administration is currently investigating the system after multiple serious crashes.

The long-term plan is a ride-hailing service with Tesla vehicles that don’t need drivers. Eventually, they plan to launch a model called Cybercab, but so far, these promises haven’t generated revenue. They’re still ideas, not businesses.

EV business weakens as rivals close in

While Musk pushes toward automation, the core EV business is under pressure. In 2024, about 80% of Tesla’s revenue came from car sales. The rest came from energy storage, solar panels, and EV charging stations. But Chinese competitor BYD is gaining fast. BYD outsold Tesla in Europe in April. Analysts think it might overtake them globally by year-end.

Last year, Tesla sold just under 1.8 million vehicles. That’s less than a third of what General Motors sold, and less than half of Ford’s. This year, analysts expect sales to drop slightly to 1.7 million. Production pauses for the new Model Y, weak US and EU sales, and Elon’s political breakup with Donald Trump haven’t helped. That fallout, tied to his MAGA comments, hurt Tesla’s brand.

The auto division’s profit margin, which used to lead the industry, is expected to fall to 17%. That’s close to Ford and GM now. It still gets a lift from zero-emission credits, but even those could be threatened as Trump’s White House pushes to relax emissions standards.

Even with all that, Tesla trades at around 138 times its expected 2025 earnings. GM and Ford are in the single digits. Colas estimates that only $20 of Tesla’s current $322 share price comes from actual earnings. The rest, 95%, is pure speculation.

Analysts like Morgan Stanley’s Adam Jonas, RBC’s Tom Narayan, and Stifel’s Stephen Gengaro treat Tesla more like a venture bet than a stable company. Jonas puts $250 per share on the self-driving and robotaxi ideas, but $0 on robots. Narayan values the robots at $5. Gengaro goes even higher—$311 for FSD and robotaxis, $29 for Optimus.

Optimus, the humanoid robot Musk claims will “perform unsafe, repetitive or boring tasks,” has shown up in demos, being remotely controlled by humans. Still, Elon claims it could one day generate $10 trillion in revenue. That’s 100 times Tesla’s current yearly sales.

Meanwhile, Waymo (owned by Alphabet) is already running over 250,000 paid rides a week in four US cities with 1,500 robotaxis. It doesn’t make its own cars; it modifies electric Jaguars. Last valuation? Around $45 billion. Nowhere near Tesla.

Tesla is also the priciest company in the “Magnificent Seven,” a group of six tech giants and Elon’s firm. Microsoft’s P/E ratio is around 32. Tesla’s is more than quadruple that.

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