Tesla (TSLA) released its Robotaxi app to the public, opening up availability beyond early Austin, Texas testers. The move is a milestone in the company’s next stage of development, transitioning from electric car leadership into self-driving transport services. TSLA stock jumped more than 3% to $350.84 on the development, as investors now contemplate in the long haul how fleet-based business lines affect Tesla’s lofty valuation.
The big EV business is in the midst of a fundamental transformation. The incumbent carmakers are pulling in EV investment as the market dips, and Tesla is investing ever more aggressively in AI and robots. Amid a background of swinging tariffs and political turbulence, the company is positioning itself no longer as a carmaker but as a provider of software, energy, and ride-hailing platforms.
Austin, Texas-based Tesla, with a market value of $1.1 trillion, is the world’s most valuable automaker. The business runs on electric vehicles, AI-driven autonomous systems, robots, and clean energy products. Tesla continues as the world’s EV adoption leader with an installed average annual car production capacity in its Chinese, European, and U.S. Gigafactories well exceeding 2.3 million cars.
Shares of TSLA have traded in a volatile 52-week range between $210.51 and $488.54. The stock is up more than 60% over the past year, outperforming the S&P 500 Index ($SPX), though still below its all-time highs. Recent momentum reflects investor optimism surrounding autonomy, with the Robotaxi launch adding fuel to Tesla’s AI narrative.
From a valuation point of view, Tesla is at premium multiples. The automaker’s trailing price-earnings (P/E) multiple is 199.14, forward P/E multiple is 282.70, and price-sales (P/S) ratio is 11.18. Its price-book (P/B) multiple stands at 14, and return on equity stands at 7.98%, a 7.30% profit margin. The multiples, relative to traditional automakers, are extreme, bulls argue, but reflective of Tesla’s position as a tech and AI company as well as an automaker. Skeptics counter that profitability remains slender relative to its rich valuation.
Tesla does not currently pay a meaningful dividend, instead reinvesting into autonomy, robots, and energy.
In Q2 2025, Tesla generated total revenue of $22.5 billion, down 12% year-over-year (YoY) as lower deliveries and lower average selling prices impacted results. Automotive revenue fell to $16.7 billion, and energy generation and storage fell to $2.8 billion. Service and other revenue rose 17% to $3.0 billion, helping partially offset declines.
Net income in the period was $1.17 billion, down 16% YoY, and diluted EPS was $0.33. Net income on a non-GAAP basis was $1.39 billion, or $0.40 a share, and missed Wall Street targets. Operating income fell 42% to $923 million, a slim 4.1% margin. Free cash flow fell drastically to $146 million, as heavy outlays in AI and robot programs offset operating cash inflows.
Management also looked ahead, stating it would navigate carefully in light of changes in tariffs, fiscal policy, and a continuation in spending on self-autonomy and robots. Tesla reminded investors it plans to launch a lower-cost model in the second half of 2025 and reiterated that its purpose-built Robotaxi car, the Cybercab, remains on track for volume production in 2026.
Notably, Tesla underscored how hardware margins would be increasingly supplemented by AI, software, and fleet-based profits in the future, underscoring the overall strategic implication of the Robotaxi launch.
Tesla has a “Hold” rating consensus, and a mean price target is a lofty $299.28, representing a potential downside of around 15% from here. The highest price target is a steep $500, premised on Tesla following through on its AI vision, while the weakest price target is a meager $115, citing valuation and execution risk concerns.
On the date of publication, Yiannis Zourmpanos had a position in: TSLA. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com