Investors have completely turned their attention to Tesla's (TSLA 2.97%) autonomous future. Despite the company's weak automotive revenue, the stock currently sits about 15% off its all-time high.
With Tesla potentially scaling its robotaxi fleet in multiple cities this year, the stock could climb higher. However, there's one hurdle it needs to overcome.
Image source: Tesla.
Tesla investors are laser-focused on its autonomous future. The company says its car owners are collecting the equivalent of 500 years' worth of driving data per day.
This is rapidly improving Tesla's full-self-driving (FSD) system and driving demand for this add-on feature. The number of Tesla owners using FSD grew 38% year over year in the fourth quarter to more than 1.1 million.
Cybercab, which is designed with no steering wheel or pedals, is scheduled to enter production this year. This signals that Tesla is preparing to rapidly scale its robotaxi service nationwide. As the service expands, investors could start to discount future earnings from this profitable revenue stream, sending the stock higher.
However, for Tesla to further scale its fleet, it has to overcome one major hurdle. The U.S. National Highway Traffic Safety Administration (NHTSA) currently limits the annual sales of vehicles that don't comply with certain safety standards, such as those with no steering wheel, to just 2,500.
The NHTSA is considering modernizing these rules, given the advancements in driverless technology. But until this cap is lifted, it could delay Tesla's Cybercab production plans and limit the stock's upside.
NASDAQ: TSLA
Key Data Points
Tesla can still expand its robotaxi service using the Model Y, the vehicle it's been using for its fleet since last year. The company is currently planning to launch in seven new cities in the first half of 2026, including Las Vegas and Miami.
Growth in Tesla's robotaxi fleet, including news that the NHTSA has lifted the cap, would likely send the stock higher in 2026. Analysts expect Tesla's earnings to grow at a 35% annualized rate over the next few years as higher margins from robotaxis begin to kick in.
