Tesla (TSLA 5.46%) is struggling when it comes to automotive sales. Last year, EV sales nationwide fell by roughly 2%. Tesla’s auto deliveries, however, fell by around 9%. So in an already weak market, Tesla failed to keep pace. In response, Tesla’s profits were nearly cut in half in 2025.
The pain continued this week when the first-quarter sales were announced for 2026. Deliveries dropped 14% from the previous quarter, though they did rise modestly year over year.
But none of this matters for Tesla investors if the company can capitalize on an emerging $10 trillion opportunity. This one opportunity could add trillions to Tesla’s market cap by 2029.
Image source: Tesla.
Tesla is betting its future on the robotaxi market
Tesla’s auto sales may have fallen last year, but the share price ended 2025 in the green, helping Tesla improve its market cap to well above $1 trillion.
Why the disconnect? Because many experts believe auto sales won’t dominate Tesla’s sales in the coming years. Instead, robotaxi revenue is expected to dominate Tesla’s trajectory.
“According to our research, Tesla’s robotaxi business could represent ~90% of its enterprise value by 2029, capturing a significant share of ARK’s projected ~$10 trillion global robotaxi market,” concludes a report from Ark Invest, a major Tesla investor.
Tesla’s ability to take a massive share of the global robotaxi market should not be understated. For the last three years running, the Model Y has been the top-selling vehicle worldwide. With production infrastructure already scaled and consumer demand to back up that production capacity, Tesla’s ability to get robotaxis on the roads quickly — an advantage that will also help it rack up reams of real-world driving data to improve its artificial intelligence (AI) models and thus further its edge in autonomous driving capabilities — may be unparalleled in the EV world.
Ark Invest’s report observes:
Tesla’s vertically integrated manufacturing offers a clear scaling advantage. Tesla can produce more than 5,000 vehicles every day. According to our research, Tesla’s Austin factory alone could produce more vehicles than urban Austin’s entire ride-hail fleet in ~9 days. Notably, this estimate excludes Tesla’s planned production of ~2–4 million Cybercabs annually, slated to begin next year.
Will Tesla shares hit $2,900 by 2029?
Tesla shares are approaching the $400 mark. But Ark Invest believes shares will be worth $2,900 by the end of 2029. The investment firm’s bear case for Tesla claims shares will be worth at least $2,000 by then.
Today’s Change
(-5.46%) $-20.81
Current Price
$360.45
Key Data Points
Market Cap
$1.4T
Day’s Range
$359.04 – $370.25
52wk Range
$214.25 – $498.83
Volume
3.9M
Avg Vol
62M
Gross Margin
18.03%
Most of this value is tied up in Tesla’s robotaxi division, not its long-standing auto sales business. By 2029, only a small fraction of the company’s earnings potential may be related to car sales. “[E]lectric vehicles could approximate a quarter of total sales and ~10% of Tesla’s earnings potential, as we believe the robotaxi business will have much higher margins,” Ark Invest estimates.
Will Tesla shares really surpass $2,000 by the end of 2029? I would be skeptical. Tesla founder Elon Musk has a long history of overpromising Tesla’s autonomous driving and robotaxi potential. He has frequently been many years off in his predictions. And judging by Ark Invest’s near-term expectations, it seems as if the firm’s price predictions take Musk’s timeline guidance seriously.
Still, the robotaxi market could eventually become a multitrillion-dollar market. And Tesla’s ability to compete seriously in that market should not be underestimated. It’s not the potential growth investors should be skeptical of, but Ark Invest’s aggressive timeline.
