By the end of the decade, Tesla's Full Self-Driving Suite could be worth billions of dollars in revenue. That's what Goldman analyst Mark Delaney noted in a note to investors, as the analyst provided his own description of what the FSD suite could do for shareholders in the future.
Tesla stock (NASDAQ: TSLA) has already had a strong week, rising about 14% in the last five trading days.
Despite the fact that shares of the EV maker's stock have increased 912 percent in the last five years, ardent supporters of Elon Musk and Tesla have stated that they have no plans to sell their shares because they believe more massive growth is on the way in the next years.
Scaling EV sales through new projects like as the mass market $25,000 car that will be offered in multiple areas, FSD licensing, and even money from car customers who want to add the suite to the purchase of their Tesla EV are all variables in this possible expansion. Tesla is already looking for a location for its future Gigafactory, and there are several incredibly appealing prospects.
While manufacturing increases are projected, significant growth may come from Tesla's FSD suite, which it intends to employ to transform and redefine passenger transportation.
Drivers will be able to not only have their cars take them to their destinations, but they will also be able to earn tens of thousands of dollars each year by having their car function as a Robotaxi, enabling a money-making ridesharing business that brings home the bread while the car owner sleeps.
Delaney's summary of FSD and what it may accomplish for Tesla's financial sheet by the end of the decade is straightforward, and it lays an obvious path to increased revenue for the company (via Yahoo!):
“We believe that Tesla’s software-related revenue could be tens of billions of dollars per year by 2030 (mostly from FSD). These scenarios suggest that in an upside case FSD could account for tens of billions of revenue per year (and more if we consider licensing of Dojo or selling FSD to other OEMs).”
Tesla has an automotive and energy divisions, but selling or licensing its FSD software would make it a software firm, if it is not already one based on FSD innovations and how it manages data from its vehicles.
Tesla could generate $625 billion in income from vehicles, software, energy, and services. On the low end, Delaney and Goldman estimate $315 billion.
“This [auto sales] could account for ~$525-600 bn of revenue. We believe services could be >$150 bn as Tesla’s installed base grows (and from opening its charging network and insurance). We believe energy, software, and robotics would make up the balance (or provide upside),” Delaney also wrote in the note.
On the negative side, Tesla faces deeper price cuts in the future years, which will strain margins and damage profitability. Furthermore, product delays, including the possibility of FSD difficulties, could cost Tesla part of this money.
Disclosure: Joey Klender is a TSLA Shareholder.
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