Update shared on03 Jul 2025
Market Misreads Tesla Again, but the Strategy Is Working
Investor sentiment around Tesla has soured lately, with mainstream media amplifying fears about Elon Musk’s political fallout and the idea that the US government might stop EV subsidies. The perception is that these are new, thesis-breaking risks.
But let’s be clear: none of this is new.
Musk has publicly rejected the need for EV subsidies for years, calling them “unnecessary” and “distorting.” As early as 2017, he told CNBC he’d prefer "no subsidies at all" (CNBC).
More importantly, my valuation model never relied on EV subsidies. This risk has been known and priced into the long-term thesis for years. Anyone acting surprised now is reacting to headlines, not fundamentals.
As for the recent Musk/Trump fallout, I view it as pure noise. It may grab attention in the media cycle, but it has no material impact on Tesla’s operations or long-term strategy. Investors should ignore the drama and stay focused on execution.
The Real News: Robotaxi Is Live and It Works
On June 22, Tesla launched its first paid robotaxi service in Austin, Texas. While still early, it was a clear success.
The fleet currently runs in a geofenced area using modified Model Ys. Rides are priced at $4.20, require an invite, and include a front-seat safety monitor for now. Early user feedback suggests the system is smooth, reliable, and rapidly improving.
This is more than just a pilot. It is proof of concept for Tesla’s vision: software-powered, scalable autonomous mobility with zero marginal labor cost.
What makes this rollout different:
- Tesla is not geofencing like Waymo. It is building toward general autonomy via AI.
- The entire stack is vertically integrated: hardware, software, chips (Dojo), and data.
- No lidar, no reliance on HD maps. Just vision, neural nets, and billions of miles of driving data.
It is the first real glimpse of Tesla’s shift away from being an automaker toward becoming a mobility platform.
Tesla’s True Nature: A Robotics and AI Company
Tesla is not just disrupting cars. It is quietly building a robotics company hiding in plain sight.
Dojo is being scaled to train both autonomous driving and robotic control systems.
Optimus, Tesla’s humanoid robot, is already performing real-world factory tasks. A Gen 3 version is expected by year-end. Musk recently stated that Optimus could be Tesla’s most valuable product line, eventually surpassing auto and energy in revenue and impact.
This convergence of hardware, AI, energy, and automation is what positions Tesla alongside companies like Nvidia, not Ford or GM.
One Word of Caution
While the long-term thesis remains intact, and is in fact playing out as planned, it is important to acknowledge that much of this is already priced in.
The market does believe in Tesla’s future. So from a valuation perspective, it is not the screaming bargain it once was.
If you believe in the 2030+ vision, it makes sense to hold or accumulate on weakness, but this is not the time to chase rallies.
Disclaimer
BlackGoat is an employee of Simply Wall St, but has written this narrative in their capacity as an individual investor. BlackGoat has a position in NasdaqGS:TSLA. Simply Wall St has no position in any companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimate's are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.