Tesla’s Market Cap Could Go Back to $1 Trillion

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24/7 Wall St. Insights

• If the launch of the Tesla Inc. ( NASDAQ: TSLA ) robotaxi is a success, the stock could soar.
• That may boost the EV maker's market cap back to $1 trillion.
• Also: Dividend legends to hold forever .

During October 2021, the Tesla Inc. ( NASDAQ: TSLA ) market cap hit $1 trillion. It was the seventh public company in history to break that barrier. The reason was a deal for Hertz to buy 100,000 Tesla vehicles. The deal failed, and Hertz has sold off the 20,000 it had put into its rental inventory.

Tesla’s stock has bounced around since the end of 2021. After hitting an all-time high of just above $400 in late 2021, it sold down to just above $100 at the start of last year. Delivery increases began to slow. Tesla had no new models other than the Cybertruck , which was launched in November of last year. Legacy car companies released rising numbers of electric vehicle (EV) models. Chinese EVs started competing with it in China, the world’s largest EV market.

Moderately good news about steady sales in China and holding a market share of about half the EVs sold in America have pushed shares up to $240. That gives Tesla a market cap of $770 billion.

The launch of the Tesla robotaxi will be later this week. Investors hope it will be the first truly self-driving vehicle in history. Tesla has a “self-driving mode,” but drivers who use it must keep an eye on the road and their hands near the steering wheel.

If the robotaxi is fully self-driving, it will be controlled by artificial intelligence and the millions of miles of roads recorded by Tesla owners. The company collects this driving data and stores it for later use.

Even if the robotaxi can operate without human intervention, it has to be approved for roads in states and cities. Last year, problems with GM’s self-driving Cruise model caused California’s Motor Vehicle Bureau to revoke permits to use it on state roads. Tesla’s self-driving safety record must be perfect to avoid the GM hurdle.

If the robotaxi does have features that make it the world’s next-generation vehicle, Tesla’s stock will soar. Its market cap will be able to move back to $1 trillion.

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