TD Cowen increased its robotaxi revenue projections for Tesla after testing the company’s latest Full Self-Driving software version and touring its GigaTexas plant, with the analyst saying autonomous vehicle scaling has become “a question of when, not if.”
Analyst Itay Michaeli reiterated a Buy rating and $509 price target on Tesla following a mobility-focused trip to Austin last week that included visits to Tesla and Mobileye.
The analyst said rides in vehicles equipped with FSD Version 14 were “smooth and impressive,” increasing the firm’s confidence in Tesla‘s autonomous driving timeline.
“We walked away from our Tesla visit with added conviction in our Buy thesis,” Michaeli wrote in a research note published Monday. The firm hosted a tour of Gigafactory Texas, experienced FSD rides including the latest V14 software, and met with Tesla’s investor relations team.
Lowered Cost Projections
TD Cowen now projects Tesla‘s planned Cybercab robotaxi could achieve an operating cost of approximately 30 cents per mile, below the 38 cents the firm previously modeled.
The reduced cost estimate followed the Gigafactory tour, where Michaeli said he gained “greater appreciation for the degree of manufacturing innovation going into Cybercab.”
The lower cost structure would allow Tesla to offer autonomous vehicle trips at prices competitive with personal vehicle ownership, potentially unlocking substantial revenue opportunities.
By the analyst’s estimates, every 5% penetration of US vehicle miles traveled in low- to mid-population density metropolitan areas — which he described as “arguably easier deployments” — could generate approximately $100 billion in revenue opportunity at $1 per mile pricing.
Tesla plans to begin Cybercab production in April 2026, a timeline Michaeli characterized as “a sign of Tesla‘s confidence in scaling RoboTaxis on HW4,” referring to the company’s fourth-generation Hardware 4 computer platform.
The analyst believes a successful ramp could result in “a step-function change in Tesla‘s revenue growth outlook,” with autonomous vehicles expected to become financially material contributors in the second half of 2026.
Software Improvement Runway
Michaeli emphasized that “significant software improvement still exists on HW4,” noting that FSD Version 14 is expected to achieve a tenfold increase in parameter count compared with current versions.
“Tesla’s strong software and hardware integration will be further leveraged with AI5/6,” the analyst wrote, referring to the company’s upcoming fifth- and sixth-generation AI training clusters
Stifel x Tesla
As reported earlier this Monday, Stifel analyst Stephen Gengaro raised Tesla’s price target for the second time in just over a month, citing progress in both FSD software and on the robotaxi rollout.
Tesla‘s stock has been volatile, hitting a new 2025 high of $474.07 on November 3 before dropping to $380.97 on last Friday’s pre-market session.
As of press time, Tesla shares are trading nearly 4% higher at $420.
