In This Article:
Key Points
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Tesla's Robotaxi business is exciting, but it's chasing Waymo's tail, at least for now.
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Rapid Robotaxi expansion is key to Tesla hitting Cathie Wood's price target.
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All of this could be easier said than done.
People tend to listen when Cathie Wood speaks on Tesla (NASDAQ: TSLA). The founder and manager of Ark Invest was one of Tesla's most vocal supporters in the mid-to-late 2010s, before the company became the electric vehicle, energy storage, autonomous driving, and robotics company it is now, with a $1 trillion market cap.
Her Tesla call lifted her flagship fund, the ARK Innovation ETF, to Wall Street fame. She remains as optimistic about Tesla as ever.
Cathie Wood has maintained that Tesla's imminent Robotaxi business, a ride-hailing fleet of autonomous Tesla vehicles, will be a game changer for the stock's value. In a recent Bloomberg TV interview, she reiterated her prediction that the stock will soar to $2,600 in five years, over seven times its current price.
Cathie Wood was right about Tesla before, but her bold prediction has a big problem this time.
What's the problem? Tesla isn't the leader this time around
Tesla pioneered the battery electric vehicle (BEV) industry. Its success showed that fully electric vehicles were viable and consumers would use them. Its success sent legacy brands scrambling to develop BEV models and paved the path for new electric vehicle start-ups.
But Tesla isn't the pioneer or the leader in autonomous driving. That distinction goes to Waymo, an Alphabet (Google) subsidiary, which began as a Google project in 2009 and has offered paid, driverless rides since March 2022.
During its Q1 2025 earnings call, Alphabet noted that Waymo currently performs over 250,000 weekly paid rides, up fivefold from a year ago. Tesla CEO Elon Musk recently confirmed that its Robotaxi service will launch by the end of June, starting with approximately 10 vehicles in Austin, Texas.
Tesla hopes to expand quickly. That's probably necessary to catch Waymo and reach Cathie's $2,600 price target in five years.
Robotaxi needs to expand quickly, and that won't be easy
That could be a tall order. In a recent interview, Ashok Elluswamy, Tesla's head of self-driving, even admitted that Waymo was probably a couple of years ahead of Tesla in self-driving.
Over three years after its launch, Waymo operates autonomously in four major cities, with two more coming soon. That doesn't mean Tesla can't grow Robotaxi faster. However, it's worth noting that Tesla's self-driving technology has only achieved level 2 autonomy, which requires constant supervision from a human driver. Due to its level 4 autonomy, Waymo can offer driverless rides.