Tesla: Media Reports Cybercab Will Join Robotaxi Fleet in Near Term

Key Morningstar Metrics for Tesla

• Fair Value Estimate
  : USD 450.00
• Morningstar Rating
  : ★★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : Very High

On Aug. 17, The Information reported that Tesla TSLA is preparing to launch the Cybercab, its vehicle built solely for autonomous driving, and put it in the Austin, Texas, robotaxi fleet.

Why it matters: We view the launch of the Cybercab as a positive step forward for Tesla’s autonomous driving software. The vehicle will be unique in that it will not have a steering wheel or pedals, so Tesla deploying it shows the software continues to advance through testing, in line with our outlook.

• Tesla plans for Cybercabs to eventually be the main vehicles for its robotaxi ride-hailing service. We think these vehicles will be among the cheaper US autonomous ride-hailing vehicles, which should allow the robotaxi service to generate strong profits.

The bottom line: We maintain our USD 450 per share fair value estimate for narrow-moat Tesla. We estimate that the robotaxi business generated well under 0.5% of Tesla’s total revenue in 2025, but it accounts for over 30% of our total valuation, as we see strong, high-margin growth over the long term.

• At current prices, we view Tesla shares as undervalued, trading in 4-star territory at roughly 25% below our fair value estimate. As such, we see the current share price as a good entry point for long-term investors.

Coming up: We expect Tesla’s robotaxi service to continue expanding into new cities throughout the remainder of the year while increasing the number of vehicles in the fleet with no safety monitors. This should set up the business for strong growth in 2027.