Are Tesla’s robotaxis really worth $7 trillion?

I was going to write about something very different this weekend, but I’ve been enthralled by coverage of Tesla’s annual shareholder meeting, particularly the discussion of the nascent robotaxi industry.  This is only tangentially related to climate risk, though it will, if it succeeds, dramatically accelerate the adoption of electric cars, which will reduce emissions and thus help save humanity from the threat of global warming.

There are also a number of elements of the discussion that will be of considerable interest to the investment and banking communities.

Elon Musk and his vast coterie of fans are certainly very bullish about the idea.  Cathie Wood, the CEO of ARK Invest, singled out by Mr  Musk as someone who understands the potential of robotaxis, suggested that Tesla’s target 2029 valuation would be boosted by more than $7 trillion by the business.  This is a remarkable number by any estimation, especially given that Tesla is yet to make a single dollar from the endeavor, one that faces the same troubles recently reported by sector leaders Waymo and GM’s Cruise.  Ms Wood predicts that 88% of Tesla’s 2029 value will be derived from autonomous vehicles.