Morgan Stanley says robotaxis could help Tesla sell more cars

Morgan Stanley analysts think Tesla’s robotaxi push could boost more than just a new business line — it could help sell more cars and software, too.

After visiting Giga Texas, analysts said they’re more optimistic about Tesla’s progress toward an unsupervised robotaxi rollout, with improvements in tricky pickup and drop-off scenarios where Tesla doesn’t have as much data from consumer usage. For now, the vast majority of its vehicles still have human supervisors in the front seat, but the analysts say the service is helping Tesla.

“Incremental unsupervised robotaxi miles driven improve the underlying autonomy model, which accelerates the path to personal unsupervised FSD [Full Self-Driving]. This, in turn supports higher FSD attach rates, improves auto demand, and cash flow generation.”

In other words, the more robotaxis drive, the better Tesla’s self-driving gets — and that could make its Full Self-Driving software more appealing and its cars easier to sell, in addition to improving its robotaxi service. Note that Tesla’s vehicle deliveries, which accounts for the lion’s share of the company’s revenue, have dropped two years in a row.

Morgan Stanley also sees a cost advantage. It estimates Tesla’s robotaxis could cost about $0.81 per mile to run today — cheaper than traditional ride-hailing and rival autonomous services — with costs falling further as purpose-built vehicles like the Cybercab scale.

Morgan Stanley maintained its equal-weight rating and $415 price target, about 4% above where the stock is currently trading.