Deutsche Bank expects Tesla to launch small-scale operations of Robotaxi services as early as next year and reiterates its Buy rating and $295 price target on the company’s shares on Monday. The firm compares the company’s efforts to rivals like Waymo and also takes into account the company’s Q3 2024 earnings report.
Deutsche Bank analysts highlight Tesla’s potential in the autonomous driving sector and emphasize the importance of end-to-end AI on which Tesla is poised to capitalize. The analysts noted the company is gearing up for a small-scale launch of Robotaxi services, likely in Texas, next year. What is especially important here is that these vehicles will operate without a human driver and offer paid rides through the Tesla app.
Deutsche Bank’s forecast is based on expectations of continued improvements to Tesla’s Full Self Driving (FSD) technology. The firm suggests that limited production of Cybercabs could begin in the second half of 2026 at Giga Texas, depending on the development of next-generation manufacturing technologies.
The analysts explained that the upcoming FSD version 13 is expected to provide “5-6x improvement” over the current 12.5 version and “1,000x improvement” over earlier iterations released in January. They believe that FSD will be able to surpass human capabilities by mid-2025, which would be a major milestone in Tesla’s quest to achieve ultra-low-cost transportation.
Tesla’s strategy is primarily focused on owning the entire Robotaxi value chain, rather than partnering with ride-hailing companies.
“Management indicated it currently does not plan to partner with ride-hailing companies, aiming to capture the entire value chain for a robotaxi network,” the note states, according to investing.com.
Tesla’s main goal is to reduce the cost of its structural platform and integrate it with FSD to achieve a very low cost per mile, which could give the company a significant advantage over its competitors. With Tesla advancing quickly, analysts expect growing investor enthusiasm, stating that “robotaxi expectations/sentiment have taken a step-up” following Tesla’s latest earnings.
