Don't Trash Tesla (TSLA) as it Thunders Towards $10T Market Cap

Business Insider

4 days ago

Tesla (TSLA) has had its fair share of doom-mongers, hecklers and party-poopers this year, but it could already be well on its way to becoming the first ever company to hail a $10 trillion market capitalization by the end of the decade.
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The EV maker is currently valued at just over $1 trillion despite a difficult 12 months of increased EV competition, threats to government subsidies and the impact of chief executive Elon Musk's on and very much off relationship with President Trump.
Many investors, however, already believe these issues are in the rear-view mirror and see a number of market-cap drivers ahead.
Robotaxis
Tesla launched its robotaxi service in Texas earlier this year with analysts hopeful that it will be right at the front bumper of a $10 trillion global market.
Indeed, some predict that Tesla's share price will reach $2,600 in the next five years, with 90% of that growth down to the robotaxi opportunity.
The market is expected to grow off the back of people willing to give up the stress of driving their own cars on congested urban roads, cutting the cost of using taxis, as well as the environmental benefits. And anyway living out those 'Total Recall' fantasies is all pretty cool, right?
A recent report from Goldman Sachs revealed that 35,000 autonomous vehicles could operate in the U.S. by 2030. That could mean generating around $7 billion in annual revenue.
Tesla won't get all that cash, of course. It has stiff competition in the sector from Alphabet's (GOOGL) Waymo and EV maker Lucid Motors (LCID), but Tesla's brand recognition could make it the leader of the pack in the years ahead.
Optimus
Musk clearly likes his sci-fi films. He has made it clear that he sees humanoid robots as the future of EV maker Tesla.
'I think humanoid* robots will be the biggest product ever,' Musk recently told CNBC. 'The demand will be insatiable. Everyone's going to want one. It's like, basically, who wouldn't want their own C-3PO or R2-D2?'
Tesla has been testing about 50 Optimus robots at its Palo Alto facility, where they are trained to walk and handle objects under supervision. Production has since shifted to Fremont, California, where Tesla also builds its cars.
Musk is eyeing up a global $10 trillion AI robotics market. He believes Optimus bots can handle mundane tasks in factories, in our homes, and beyond.
That could free up valuable labor time and cut costs for businesses as well as ensuring that little Timmy never gets told off for having a messy bedroom again or big Timmy doesn't get scolded for leaving a beer can in the fish tank.
There have been some production delays and tech hurdles such as overheating robot hands, but Musk believes ramping up Optimus production could eventually drive Tesla's valuation to sweltering heights of $30 trillion.
Analysts at Barron's even believe that the Optimus could become as ubiquitous in our everyday life as the Apple (AAPL) iPhone.
Analysts project the humanoid robot market to grow at a 17.5% CAGR from 2025 to 2030. Tesla's Optimus could generate $250 billion in revenue by that date.
FSD
In the U.S. there are 120 traffic related deaths every day. That is almost 1,000 people every week, or the equivalent of three huge plane crashes.
These numbers have become almost accepted by society, but Tesla's Full Self Driving technology has the potential to change the narrative and ensure Moms, Dads and kids come home safe every evening.
As per its second quarter report, Tesla recorded one crash for every 6.69 million miles driven for vehicles that were using its Autopilot technology. For drivers who were not using Autopilot technology, it recorded one crash for every 963,000 miles driven.
Musk has promised unsupervised FSD by the end of this year which could lead to more demand for Tesla vehicles.
Passive Income
Investors and users are increasingly looking at the Tesla platform as a way of making passive income from a set of wheels. That includes income from car-sharing, in-car advertising, and affiliate marketing. Just sit back and enjoy those dollars flowing in as your car does the work for you.
Energy Storage
Tesla's energy business saw total energy generation and storage revenue jump 67% year over year to more than $10 billion in 2024. After deploying 14.7 gigawatt hours (GWh) of storage in 2023, Tesla more than doubled this figure to 31.4 GWh in 2024.
Its Megapack product – a grid-scale battery storage solution designed for utilities and large-scale commercial customers has led the way. The company is producing Megapacks at its dedicated Lathrop, California, facility, and recently started production at a second Megapack factory in Shanghai, with a target production of up to 40 GWh of capacity per year.
The Battery Energy Storage System Market grew from $56.29 billion in 2024 to $68.70 billion in 2025. It is expected to continue growing at a CAGR of 22.13%, reaching $186.90 billion by 2030.
It's being driven by the energy transition story and the need for storage solutions when the sun doesn't shine and the wind doesn't blow.
The wind could be blowing kindly in Musk's direction for the rest of the decade.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 14 Buy, 15 Hold and 8 Sell ratings. Its highest price target is $500.