Tesla Robotaxi Software Will Get TSLA a $1T Market Cap Even with Only 20 PE

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During the Q4 2020 Earnings Call, Tesla CEO Elon Musk said that the company's current valuation is justified, and Tesla could double its revenues when it develops a network of self-driving Robotaxi. That could potentially lead to a valuation of around $1 trillion, but that will hinge on major improvements in Tesla's autonomous driving technology.

Musk came up with the idea of ​​creating a network of Robotaxi that can drive, park, and connect to each other using Tesla's self-driving technology. To this end, the company plans to develop its own app, in which customers can call a car or add their car to the network.

This means that cars in the Robotaxi Network will be used for about 60 hours a week, rather than 12 hours as if a car is used for private purposes, according to Musk. This in turn brings about five times more utility, and Tesla could charge more, which would bring in a new stream of revenue. According to Musk, even if their use only doubled, it would still double Tesla's car revenue, which is almost entirely gross margin.

Musk said:

"So it would mean, it would be like if you made $ 50 million - $ 50 billion worth of cars, it will be like having $ 50 billion of incremental profit basically from that because it's just software. So - it's like $ 1 trillion and the company is still in high-growth mode. So I think there is a way to sort of like justify the valuation of the company where it is using just the cars and nothing else, the cars with FSD. And I suspect at least some number of investors are taking that approach."

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