This article first appeared on GuruFocus.
Tesla (NASDAQ:TSLA) could gain a cost advantage in the robotaxi market through its Cybercab, but Goldman Sachs says software performance will be more important to the business case.
Tesla began robotaxi rides with Cybercab following its Sept. 3 event in Austin and said its vehicles had completed 1 million miles without active driver control. Goldman estimates a scaled Cybercab costing $20,000 to $30,000 could have a per-mile advantage of five to 30 cents versus rival autonomous vehicles priced at $50,000 to $100,000.
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The bigger question is whether Tesla can expand its autonomous-driving system across more markets. A wider network could increase vehicle utilization and allow software economics to play a larger role in profitability.
Goldman maintained a Neutral rating with a $360 price target. The firm sees potential upside toward $500, while its downside case is about $150.
Robotaxi scaling and autonomous software execution remain key factors behind Tesla's valuation.