Morgan Stanley said on Tuesday it expects Tesla to increase its Robotaxi fleet size to 1,000 vehicles next year, as the company is set to expand the service across several cities in the US.
In a new research note, analyst Andrew Percoco added that “by the end of 2035, we expect Tesla to have 1 million Robotaxis on the road across multiple cities.”
Reacting to the recently surfaced videos of Robotaxis without safety operators on the road in Austin, the analyst said this is “the single most important NT catalyst in validating its robotaxi strategy.”
On Monday, Musk confirmed that vehicles without any occupants are already being tested, aligned with his target of removing safety drivers by year-end in the city where the service launched.
Additionally, Percoco said that a “robust and reliable robotaxi fleet should serve as a clear precursor to the accelerated deployment of fully unsupervised personal FSD [Full Self-Driving].”
Fleet Expansion
Late last month, Musk announced the company’s plans to double the number of Robotaxi vehicles operating in Austin during December, although it remains unclear how many units are currently on the road.
As of Tuesday, estimates from the website (Tesla) Robotaxi Tracker suggest that the company currently operates 31 vehicles in Austin and 126 in the Bay Area.
These represent about 32 more vehicles than two weeks ago, 30 of them being in California and only two in Austin.
However, neither of the figures have been confirmed by the company.
In October, Musk said at the All-In Podcast that he expected there to be 500 Robotaxis operating in Austin and 1,000 in the Bay Area by the end of the year.
Musk Pay Package Targets
The firm’s view is aligned with the targets set in the recently approved pay package for CEO Elon Musk, which can go up to $1 trillion if the ambitious goals are reached.
The compensation plan is also tied to 1 million Optimus humanoid units delivered and 10 million active Full Self-Driving subscriptions.
The highly controversial package was approved in early November, at the Annual Shareholder Meeting, where Musk also announced the timeframe for key products in the next couple of years, including the new Roadster and the start of Cybercab production.
The Cybercab model, expected to begin manufacturing operations in April 2026, is one of the several upcoming milestones highlighted by Percoco.
The analyst is also paying attention to the public rollout of the service and how safety metrics perform as usage increases.
Bearish View
Despite seeing Tesla reaching its ambitious targets in ten years, Morgan Stanley has a bearish view on the stock.
A week ago, the firm downgraded the rating on the company to Equal Weight, despite a price target increase from $410 to $425.
“While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the Tesla shares over the next 12 months,” Percoco wrote then.
On December 8, when the note was published, the target implied a 6% downside on the stock.
As of press time, Tesla is trading at $479 on Tuesday’s market session, just $9 below its all-time high (reached a year ago).
The company’s shares have jumped 18.6% since the beginning of 2025, posting a 13% gain over the past three months.
The stock surge has been driven largely by investors’ expectations for future products.
