To The Moon

$Tesla Motors(TSLA)$

After years of bold promises and ambitious forecasts, Tesla has finally begun testing fully autonomous vehicles on public roads—and the stock market responded with a surge of enthusiasm. On Sunday, Tesla quietly rolled out paid driverless rides in Texas. By Monday morning, Tesla shares jumped more than 8%, signaling renewed investor optimism in the company’s self-driving ambitions.

This marks a potentially pivotal moment in Tesla’s long-term story. The company has been touting its autonomous driving capabilities for nearly a decade, consistently asserting that full self-driving (FSD) was “just around the corner.” While delays and regulatory hurdles have kept that vision from materializing—until now—this recent launch represents tangible progress in a space that Tesla has treated as critical to its future.

But underneath the excitement, real questions remain. Early footage from the rollout shows vehicles bending traffic laws, making questionable decisions, and at times creating unsafe scenarios. And from a financial standpoint, the stock's surge may feel disconnected from the company’s underlying fundamentals. The valuation was already sky-high, and the launch—while symbolically important—hasn’t yet changed the financial outlook in any meaningful way.

So what should investors make of all this? Is this the beginning of Tesla's long-awaited robo-taxi revolution, or just another cleverly marketed milestone designed to keep the hype machine running?

Let’s unpack the facts.

A Decade in the Making: Tesla’s First Paid Driverless Rides

Tesla has been teasing fully autonomous driving since as far back as 2014. Elon Musk has frequently suggested that the technology was just around the corner, even claiming several times over the years that "next year" would be the year of the robo-taxi. It became something of an inside joke among Tesla skeptics. But this week, those long-standing promises finally began to materialize.

In Austin, Texas, select riders were able to book paid rides in driverless Model Y vehicles—with no one in the front seat. The launch represents the company’s first step toward creating a commercial self-driving taxi service.

However, the real-world performance of these robo-taxis was mixed at best.

Real-World Testing Begins—With Real-World Risks

The launch of Tesla’s paid driverless rides was met with immediate scrutiny, and in some cases, alarm. According to reporting from Bloomberg, Tesla's vehicles violated traffic laws on the first day of testing.

In one video posted by Rob Maur, a Tesla investor and podcast host, a Model Y enters an intersection from a left-turn-only lane, hesitates, then swerves right into a lane designated for oncoming traffic. The moment was jarring—and understandably sparked safety concerns, particularly since there was no human in the driver’s seat to intervene.

Other test riders shared footage on social media showing the autonomous Teslas exceeding posted speed limits. For example, Tesla investor Sawyer Merritt documented his vehicle accelerating to 35 mph in a 30 mph zone, noting that surrounding traffic was moving even faster—closer to 39 mph. While some defended the car's behavior as adaptive and context-aware (i.e., keeping up with the flow of traffic), others pointed out that this highlights the ambiguity of autonomous systems navigating real-world laws.

Crucially, however, no major accidents or injuries were reported. The vehicles made mistakes, yes—but they also completed full rides, collected real-world data, and demonstrated that Tesla’s FSD technology is, at the very least, road-capable in certain conditions.

For Tesla, that’s a meaningful win.

Notable Incidents

• In one widely circulated video, Tesla investor and podcast host Rob Maur rode in a Model Y that hesitated at a left-turn-only lane, swerved right, and then entered an empty lane meant for oncoming traffic. It was a jarring moment—even for a seasoned Tesla bull—and underscored just how risky real-world autonomy can be when software fails to make fast, confident decisions.

• In another case, Tesla supporter Sawyer Merritt posted footage of a driverless vehicle accelerating to 35 mph in a 30 mph zone. He defended the system, noting that surrounding traffic was moving closer to 39 mph and that it may have actually been safer to keep pace than obey the posted limit.

These incidents didn’t result in accidents or injuries, but they reveal how Tesla’s driverless technology still occasionally breaks traffic rules, makes unpredictable decisions, and lacks polish. Given that these are paid, public-facing rides, such flaws will be closely scrutinized by regulators, safety advocates, and competitors alike.

The Bar for Success Is Lower Than You Think

Despite the imperfections, many investors and analysts still consider this launch a successful moment for Tesla.

Why? Because the standard of success for Tesla’s autonomous efforts isn’t perfection—it’s progress. Anything short of a complete disaster counts as forward movement. As long as no serious incidents occur, the company can credibly say it’s making strides in a multi-decade race toward driverless mobility.

And Tesla has something most of its competitors don’t: world-class marketing.

This is a company that has long excelled at spinning narrative and turning potential setbacks into promotional material. Don’t be surprised if Tesla issues statements comparing its robo-taxi safety data to that of average human drivers—an area where, statistically, most autonomous systems already perform favorably.

So even if the software is far from finished, the ability to put cars on the road, collect real-world data, and market that progress is an enormous advantage. It’s part of Tesla’s broader strategy to lead the conversation around the future of mobility—even when the product isn’t quite there yet.

The Real Engine Behind the Rally: Investor Psychology

Tesla doesn’t trade like other automakers—and it hasn’t for years. While legacy car companies live and die by their quarterly earnings, Tesla trades more like a tech platform, a future-oriented AI leader, or even a belief system.

Over the past decade, the company has built a community of investors who are willing to wait. They’ve tolerated delays in Full Self Driving (FSD), shifting timelines, and product feature gaps because they believe in the long-term vision: autonomous vehicles, AI-driven services, vertical energy solutions, and global scale.

And that belief has had real market consequences. Tesla is not just the most valuable carmaker in the world—it’s one of the most richly valued companies, period. That’s not because it sells the most cars (it doesn’t) or makes the most profit (not even close), but because it has convinced the market that it’s building the future.

The autonomous taxi rollout is a powerful reinforcement of that story. It shows momentum. It offers evidence—however imperfect—that Tesla is still pushing forward in a space where most companies have stalled or failed. And that’s enough to re-ignite enthusiasm, even if fundamentals haven’t changed.

Fundamentals: Is the Valuation Justified?

This brings us to the real question: Is Tesla worth what it’s trading at?

According to my proprietary discounted cash flow (DCF) model, the answer is no. Based on aggressive assumptions—including a 20x increase in free cash flow over the next decade—I still estimate Tesla’s intrinsic value at approximately $81 per share.

Let’s break that down:

• 2025 Forecast Free Cash Flow: $5 billion

• 2035 Forecast Free Cash Flow: $93 billion

• Valuation Assumption: Compound annual growth, reinvestment, discount rate, and terminal value all incorporated

Even with this extraordinary forecast, which assumes Tesla will dominate autonomy, energy, and global EV markets, the stock’s current price of $348 per share appears extremely overvalued.

That tells us something important: most of Tesla’s perceived future success is already baked into the stock price. Investors aren’t just buying Tesla’s current business—they’re paying upfront for potential breakthroughs that haven’t happened yet and may not generate revenue for years.

In short, the risk/reward ratio looks heavily skewed toward belief over fundamentals.

Final Thoughts: A Milestone, Not a Moonshot—Yet

This week’s news is undeniably positive for Tesla’s long-term narrative. It shows real progress toward the robo-taxi vision that has been central to Elon Musk’s forecasts for the better part of a decade. The rollout wasn't flawless, but it wasn’t catastrophic either—and in Tesla's world, not being a disaster is a win.

For existing shareholders, this is the kind of development that reinforces conviction. It signals that Tesla is still innovating, still pushing boundaries, and still ahead of many traditional automakers and startups alike. It gives long-term bulls another reason to keep holding.

But for potential investors, the question is different: Does this justify buying Tesla stock at current levels?

In my view, the answer is no. The valuation already reflects an extreme level of future success, and even dramatic improvements in technology or revenue may not be enough to push the stock much higher from here.

That said, if you believe in the long-term potential of autonomous driving and Tesla’s ability to lead that market, you may view this as one more piece of evidence that the company is on the right track. But it’s essential to recognize that you’re not just buying into a company—you’re buying into a vision. And visions, while powerful, are hard to value with precision.

Conclusion

Tesla’s launch of driverless vehicles in Texas is a major milestone in the company's push toward autonomous mobility. It's also a masterclass in marketing, investor psychology, and managing expectations. The stock surge reflects not just what Tesla has done—but what people believe it will do.

For now, the road ahead remains promising, but risky. Progress has been made. But perfection—and profitability—are still a long way off.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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