UBS Raises Tesla Target Price Amid Robotaxi Optimism but Maintains Sell Rating

UBS increased its price target on Tesla (TSLA) to $235 from $190 following the launch of the company's robotaxi pilot in Austin, Texas. Despite the upward revision, the bank retained its Sell rating, arguing that Tesla's current valuation already prices in lofty expectations for autonomous driving and future technologies.

The robotaxi market presents a substantial long-term opportunity, with UBS projecting a potential fleet of 2.3 million vehicles by 2040, generating $200 billion in annual revenue. The bank values Tesla's robotaxi business at $99 per share—a figure now embedded in its updated model. Yet, UBS remains cautious, noting execution risks and regulatory hurdles that could delay commercialization.

At a $1.14 trillion market capitalization and a price-to-earnings ratio of 181, Tesla's stock leaves little margin for error. Elon Musk has positioned autonomy and robotics as Core growth drivers, but UBS contends that much of this potential is already reflected in the share price.