Tesla's stock could climb by more than 25% as robotaxi efforts intensify, analyst says

By William Gavin

The bulk of Stifel's new Tesla price target is predicated on the company's Full Self-Driving and robotaxi technologies

Tesla's robotaxi ride-hailing service is expected to eventually be a major contributor to the company's future growth.

Tesla Inc.'s stock could rally more than 25% as the electric-vehicle maker progresses with its pivot to autonomous vehicles, according to an analyst.

Stifel raised its price target on Tesla's stock (TSLA) to $508 per share from $483 in a Sunday note to investors. The stock closed Monday's trading at $408.92, up 1.1%.

Tesla has been working on self-driving vehicles for more than a decade and officially launched its first feature, Autopilot, in October 2015. But the company has found it difficult to advance its ambitious plans for a number of reasons, including regulatory investigations.

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Stifel analysts led by Stephen Gengaro bake $186 a share of value from Tesla's Full Self-Driving advanced driver-assistance system into their current price target. That system is enabled in about 12% of Tesla's fleet and costs customers either a subscription fee of $99 per month or an $8,000 flat fee.

In a note, Stifel said the latest version of FSD "appears to be working well," adding that Tesla plans to add "reasoning capabilities" to future versions. Tesla says the software is much better than human drivers at keeping people safe and that more than 6.4 billion miles have been driven with FSD enabled.

That technology is the backbone of Tesla's planned robotaxi ride-hailing service, which analysts see as a major factor that could drive future growth. Stifel attributes $158 of its current price target to robotaxis.

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Tesla currently offers robotaxi rides in Austin, Texas, and in the San Francisco Bay Area. For now, the company uses Model Y SUVs overseen by a safety monitor who is capable of intervening if necessary.

But by the end of the year, Tesla plans to expand to another five U.S. cities, take the safety drivers out of Austin and scale up its existing fleet to at least 1,500 vehicles, according to CEO Elon Musk. A designated robotaxi vehicle is expected to enter production in April.

The remainder of Stifel's stock projection comes from its earnings forecasts ($134 a share) and estimates for Optimus, Tesla's line of humanoid robots ($29 a share). Despite Musk's rosy projections and a product demonstration planned for early 2026, Optimus is still largely unproven.

Stifel said it expects Tesla to report earnings before interest, taxes, depreciation and amortization of $14.86 billion for 2025 and $19.49 billion for 2026. That's well above the Wall Street consensus of $13.17 billion for 2025 and $15.45 billion for 2026, according to FactSet.

However, Stifel noted that Tesla's fourth quarter may be rough after U.S. consumers pulled ahead EV purchases ahead of a September tax-credit deadline. Although Tesla released cheaper versions of two vehicles last month to boost sales, Gengaro said those are "slower than anticipated."

-William Gavin

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11-17-25 1754ET