Episode summary
Our Updated Tesla Valuation, Explained
ARK Invest
· · 15 min · Hosts: Tasha Keeney, Daniel Maguire
Summary
ARK’s updated Tesla valuation extends the forecast horizon from 2029 to 2031 and still puts robotaxi at the center of the story. The model now assigns about 80% of Tesla’s enterprise value to robotaxi in 2031, down from roughly 90% in the earlier view, mainly because Optimus now matters more in the valuation.
The guest said the base case assumes about 1 million Optimus units deployed by 2031, earning robot-as-a-service revenue with software-as-a-service-like margins. That is framed as conservative versus Elon Musk’s public comments suggesting far larger deployment numbers. The model also adds a new AI infrastructure line item, with Tesla cumulatively spending about $225 billion by 2031 on chips, Terafab, and related infrastructure, up from roughly $7 billion at the end of last year.
On robotaxi economics, the team updated pricing using willingness-to-pay research across income deciles and said the model does not assume surge pricing. They also explained why FSD subscription revenue is excluded even though North American attach rates reportedly reached about 75% last quarter. The conversation closed on the idea that a Tesla-SpaceX merger could create strategic synergies around chips, power, and Starlink connectivity, though the timing and approval hurdle remain uncertain.
Key takeaways
- The guest said robotaxi still drives about 80% of Tesla’s enterprise value in 2031, even after Optimus gains a larger role.
- ARK’s base case assumes roughly 1 million Optimus units deployed by 2031, which the guest called conservative versus Elon Musk’s public estimates.
- The model adds a new AI infrastructure spend line of about $225 billion cumulatively by 2031, versus roughly $7 billion at the end of last year.
- FSD subscription revenue is excluded from the model, even though the guest said North American delivery attach rates were about 75% last quarter.
- The guest argued a Tesla-SpaceX merger could unlock chip, power, and Starlink synergies, but said shareholder approval is a high hurdle.
Notable quotes
“our last model the 2029 had uh the robo taxi really at roughly 90% as you say and the decline towards the 80% is because of the one of the main updates we made this year was external optimist sales”
“by 2031 uh our base case assumes that there will be roughly 1 million optimist deployed uh earning robot as a service revenue with software as a service like margins”
“we estimate that by 2031 Tesla could cumulatively spend on average $225 billion on AI infrastructure”
“the average price of ride hill today it's $2.80”
“we currently don't model for FSD subscription”
How the episode opens
Daniel, last week we published our long-awaited updated Tesla valuation. You can find it on the ARC-invest site. Um, many of our readers were were waiting for this uh since our 2029 valuation.
This our 2031 valuation. Um, there's a a few important things that are updated about this model, but you know, let's talk about the headline figures. Um, first, the majority of Tesla's value, we believe in the next five years will be attributable to robo taxi.
So that that's a that's a constant um as as we we had you know in in the previous model um that number went down slightly. It's roughly 80% of the enterprise value we think in 2021 will be attributable to robo taxi and that's because in the time period we expect optim optimist to scale um incrementally more than than we assumed would happen two years prior.
Yeah that's exactly right. So uh our last model the 2029 had uh the robo taxi really at roughly 90% as you say and the decline towards the 80% is because of the one of the main updates we made this year was external optimist sales. Uh so for context by 2031 uh our base case assumes that there will be roughly 1 million optimist deployed uh earning robot as a service revenue with software as a service like margins.
And for context for the viewers of 1 million deployed by 2031, that is very conservative relative to Elon's statements. So for the same year in 2031, Elon is on the record of saying h believes there could be 100 million or 1 billion optimist deployed. So relative to our 1 million base case, it's quite conservative there.
And that was one of the the main updates uh along with various other ones uh which is really driving some of the price changes
And and to you know quickly do a pit stop on Optimus.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tesla valuation
- robotaxi assumptions
- optimus outlook
- ai infrastructure spend
- potential tesla-spacex merger
Companies and tickers mentioned
- TSLA
- Ark Invest
- Tesla
- SpaceX
Watch the episode
Watch “Our Updated Tesla Valuation, Explained” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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ARK Invest, this episode and its artwork belong to ARK Invest. Octagon is not affiliated with the show; this page is an independent summary.
