Could Tesla Inc (NASDAQ:TSLA) boast odds on operating a ride-sharing fleet within the next 5 years?
The Street’s tech expert Gene Munster– from his research-driven, venture capital firm Loup Ventures – sees a “multi-billion dollar ride sharing opportunity” ahead for the electric car empire; one that has a more than 50% chance to hit by 2023. This fleet has the potential to bring a $2 billion to $6 billion in “high margin” revenue for the company by this time, calculates the research analyst; a big deal for a company who present-day has yet to turn a profit.
Moreover, the analyst predicts odds are over 50% that CEO Elon Musk’s company will let owners of Tesla vehicles add these electric cars to the fleet, at least “part-time.” Munster wagers, “While only a small percentage of owners will opt in, the financial reward is measurable and could earn the owner enough to pay their vehicle lease.” The company could have anywhere from 4% to 10% of the domestic ride-sharing market within five years’ time, by Munster’s estimation. “If several key obstacles are overcome, most notably achieving autonomy, Tesla will have a handful of substantial advantages over competitors in the space,” Munster asserts.
“Don’t count Tesla out of the shared mobility space,” the analyst continues, noting, “The idea that Tesla vehicles could be utilized in an autonomous fleet has been shared in a handful of public statements by Musk […]” an opportunity that could bring billions on billions for the company. Munster bets on 3.5 million Tesla vehicles to showcase full self-driving power by 2023. For those willing to share their vehicle in this autonomous fleet, Munster anticipates, “you may be able to earn enough money to cover your entire lease payment and earn income.”
Overall, the analyst surmises with bullish enthusiasm on Tesla’s ride-sharing fleet prospects waiting in the wings: “While we still expect the first iteration of fully autonomous mobility to be a shared ride-hailing platform, the Tesla fleet idea presents a differentiated approach down the road. Significant advances in software, passing of key legislation, and production hurdles stand between where we are today and realizing this potential, but the magnitude of the opportunity is too large to ignore.”
TipRanks points out a very split Wall Street when it comes to the battle between the bulls and the bears on Tesla stock. Out of 20 analysts polled in the last 3 months, 5 rate a Buy on Tesla, 8 maintain a Hold, while 7 issue a Sell on the stock. The 12-month average price target stands at $320.41, marking a nearly 2% downside from where the stock is currently trading.