Goldman says it will take time for Tesla to ramp robotaxi, FSD revenue

Investor interest in Tesla's (NASDAQ:TSLA) Advanced Driver-Assistance Systems (ADAS) and autonomous driving software has surged recently, including the company’s much-debated Full Self-Driving (FSD) consumer offering and potential robotaxi services.

According to Goldman Sachs analysts, the increased attention aligns with a broader market focus on AI-driven technologies.

Notably, Tesla has highlighted enhancements in FSD performance, attributing improvements to an end-to-end neural network approach in its latest version, FSD 12.3.

Moreover, a recent post by Tesla's CEO Elon Musk on the social platform X also attracted interest, with the billionaire businessman saying the company will unveil its Robotaxi on August 8, 2024.

“The bottom line is that we believe Tesla is among the leaders in autonomy/ADAS technology, and in the long-term we believe that software&digital services can be a meaningful driver of its business,” Goldman analysts noted.

Still, the Wall Street giant thinks “it will take time before Tesla can drive more significant growth in either robotaxi or FSD revenue,” saying the automaker must first reach at least L3 capability with FSD to fuel significant adoption at $99 per month.

In addition, analysts believe Tesla’s initiatives that are specifically related to robotaxis “are likely in the earlier phases based on permitting requests (and this is a technology that has historically faced difficulties including with respect to R&D and regulations),” they wrote.

Goldman also acknowledged that the integration of the latest GPUs, combined with Tesla's end-to-end neural network approach, could potentially accelerate the development of its technology beyond current expectations.

However, the prevailing view remains that scaling and refining these businesses “will take time.”