Tech • AI • Robotics • Game
ARK's New Tesla Price Target Is Absolutely Insane
7/10TL;DR
ARK Invest now values Tesla at $4,400 a share by 2031 in its base case, driven overwhelmingly by a projected robotaxi business and, increasingly, by Optimus humanoid robots.
KEY POINTS
Valuation jumps as horizon extends
ARK Invest’s new five-year model points to a 2031 base-case valuation of $4,400 per share, up from roughly $2,600 in its prior model that ran through 2029. At Tesla’s current share price near $369, that implies more than a tenfold increase and a market value above $17 trillion. The firm’s bear case is still high at $3,300, while the bull case sits only modestly above the base case, suggesting a narrower spread of outcomes than before.
Robotaxis remain the core of the thesis
Robotaxi operations account for 81% of Tesla’s projected 2031 enterprise value, making autonomous ride-hailing the central assumption behind the forecast. ARK projects Tesla could have 4.8 million robotaxis in its bear case, 8.1 million in the base case and about 10 million in the bull case by 2031. It estimates annual ride-hail net revenue of about $500 billion in the bear case, roughly $750 billion in the base case and close to $1 trillion in the bull case.
Optimus becomes a material contributor
The biggest structural change in the model is the addition of Optimus, Tesla’s humanoid robot program, which now represents 14% of projected enterprise value in 2031. ARK estimates Tesla could sell 1 million Optimus units to outside customers by that year, generating about $212 billion in revenue in the base case. Sales to external buyers are modeled to begin between 2027 and 2030, with human-level skill assumed around 2031.
Energy is large in revenue, small in valuation impact
Energy storage contributes only about 2% of projected enterprise value despite still being modeled as a business capable of generating more than $100 billion in revenue. In ARK’s framework, it is meaningful operationally but not a major driver of valuation compared with robotaxis and Optimus. That highlights how strongly the model rewards software-like margins and autonomous network economics over manufacturing-heavy segments.
Key assumptions were revised
Several inputs were made more conservative. Expected annual miles per robotaxi were reduced from a prior 70,000 to 120,000 range to about 65,000. Gross automotive margin assumptions were also cut, with the upper end lowered from 80% to 50%, while valuation multiples for vehicle and energy businesses fell from 13 times to 10 times.
AI spending is treated as value creation
The model assumes Tesla will spend heavily on computing and AI infrastructure, including about $225 billion in 2031 alone on AI infrastructure and chip development. ARK estimates 10% to 25% of year-end cash could be allocated to AI infrastructure. Rather than treating that only as a cost, the model assumes higher AI spending can increase company value by accelerating autonomy and robotics capabilities.
Older business lines were removed or reduced
The updated framework removes several previously modeled contributions, including a human-driven ride-hailing phase, Tesla Insurance, and China robotaxi. With robotaxi launch timing no longer hypothetical, that input also drops out. The revisions show a sharper focus on fully autonomous transport and robotics rather than transitional businesses.
Regulation remains the main risk
The largest downside risk identified is a slower-than-expected robotaxi rollout caused by regulatory delays. Other risks include an unexpected departure of Elon Musk and major external disruptions such as natural disasters or pandemic-like shocks. Even so, ARK argues regulatory risk appears to be easing.
CONCLUSION
The revised Tesla model rests primarily on one bet: that autonomous ride-hailing scales rapidly and profitably by 2031. Optimus is now emerging as a second pillar, but the valuation still depends above all on robotaxis becoming a mass-market business.
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