Analyst: Tesla's autonomous taxi has the highest value of $870 billion, which will disrupt the automotive industry!

Is Tesla's robotaxi worth more? Analysts estimate that it will account for about 70% of Tesla's market value.

On July 19th, according to the Financial Times, RBC Capital Markets set Tesla's target price at $305-$360, predicting that Tesla's market value will exceed $1 trillion, and the optimistic estimate for the value of robotaxis could reach $870 billion.

Tom Narayan, an analyst at RBC Capital Markets, explained in his latest report why he believes Tesla's market value will exceed $1 trillion. The valuation of Tesla's automotive business is estimated to be around $93.182 billion, the valuation of FSD business is estimated to be around $235.375 billion, and the valuation of the robotaxi business is estimated to be around $729.263 billion.

Narayan believes that the emergence of robotaxis will disrupt the automotive industry, as they solve all problems:

We believe that in our lifetime, robotaxis may change society more than anything else. They can save millions of lives and save trillions of hours.

There are too many people dying in traffic accidents globally, 93% of which are caused by human error. There is too much parking space in city centers, and commuters spend too much time in slow traffic. These are all problems that robotaxis urgently need to solve.

We expect that many cities around the world may ban private cars (after the emergence of robotaxis). It is important to consider the value, convenience, and low cost provided by autonomous vehicles. We believe that consumers will no longer buy private cars.

According to Narayan's speculation in the report, assuming that robotaxis can obtain comprehensive approval from regulatory agencies before 2035 (ensuring the feasibility of the technology by 2030), it is estimated that the cost of a robotaxi may be $50,000 by then, and one robotaxi may replace five private cars:

Based on calculations, due to higher utilization (in the United States, taxis travel six times the mileage of private cars per year), the cost of robotaxis should be much lower than that of private cars.

In addition, since robotaxis do not require drivers (drivers account for 45% of Uber's costs), the price of robotaxis may be 55% of the current Uber price.

This price should greatly increase the attractiveness of robotaxis to consumers and make them willing to use robotaxis instead of private cars. According to conservative estimates by the Royal Bank of Canada, the penetration rate of Tesla's robotaxi in the United States will be 25%, in Western Europe it will be 8%, and in China it will be 7%. The global penetration rate of non-Tesla robotaxis is 20%:

There have been frequent reports about Tesla's developments in the field of robotaxis.

On May 16th of this year, Tesla CEO Elon Musk mentioned in an interview with CNBC that Tesla hopes to upgrade its autonomous driving system to achieve the technological level required for robotaxis.

Tesla mentioned that the average usage time of passenger cars is only 10 to 12 hours per week. In most cases, vehicles are parked near the user's home or workplace, resulting in low utilization efficiency. Therefore, in Tesla's view, after installing the autonomous driving program, car owners can use their vehicles as robotaxis during idle times to earn additional income.

In fact, in 2019, Tesla announced the "1 million Tesla autonomous taxis on the road" plan, allowing users to add their idle Teslas to the ride-hailing network to make money. This sounds exciting, but obviously, this plan has not been fully implemented and it still requires the FSD technology and conditions to be mature enough.

Therefore, Narayan also reminded investors in the report not to overlook the possibility that the market value of robotaxis could be zero, which would cause Tesla's stock price to plummet by 67%.

So far this year, Tesla's stock price has risen by 168%. And today is the day when Tesla releases its financial report. In the past four quarters, every time Tesla released its financial report, the company's stock price averaged a 9% increase or decrease. Will Tesla have any "surprises" today?