Reconstruction of Valuation Logic for Tesla's Transition from Electric Vehicle Manufacturer to AI Autonomous Driving Company

As of December 17, 2025, Tesla’s stock price closed at $486.24, with a market capitalization of $1.57 trillion and a year-to-date gain of 28.20%[0]. The stock price trend shows a clear upward trajectory, and technical indicators indicate that the stock has stabilized above the 20-day, 50-day, and 200-day moving averages, forming a bullish排列[0].

According to the latest technological progress, Tesla FSD has achieved significant breakthroughs:

• Unsupervised FSD Basically Realized
  : Musk recently disclosed that unsupervised FSD has basically been solved and will be validated on Robotaxis with safety drivers removed[1]
• FSD V14.2 Version
  : The current version has reached the “quasi-L4 reassurance stage”, progressing from L2 advanced driver assistance a year ago to the current quasi-L4 level[2]
• New Model Deployment Soon
  : A new model an order of magnitude larger than the current one is expected to be deployed in January-February 2026, introducing extensive inference and reinforcement learning capabilities[1]

Traditional automakers mainly use relative valuation methods such as price-to-earnings (P/E) and price-to-book (P/B) ratios. By traditional standards, Tesla’s current P/E ratio of 295.60x and P/B ratio of 19.63x appear overvalued[0]. Traditional DCF analysis shows that even in the most optimistic scenario, Tesla’s fair value is only $188, representing a 61.2% downside from the current price[0].

• Data Flywheel
  : Tesla has the world’s largest real driving dataset, with each Tesla serving as a data collection node
• Algorithm Iteration
  : Data scale advantages enable the FSD system to continuously optimize, forming an overwhelming advantage over other competitors

• Robotaxi Service
  : On June 22, 2025, Tesla launched its Robotaxi service in Austin, with approximately 135 vehicles currently in operation[4]
• Subscription Revenue
  : The monthly fee model for FSD services will generate a continuous high-margin revenue stream

• End-to-End Neural Network
  : Tesla’s pure vision route has achieved qualitative changes driven by large computing power models[1]
• Self-Developed Chips
  : To meet AI computing power needs, Tesla may need to build its own giant chip factory[1]

According to 2024 data, Tesla’s revenue structure is still dominated by vehicle sales (78.9%), but services and other revenue have accounted for 10.8%[0]. With the expansion of FSD and Robotaxi businesses, this ratio will undergo fundamental changes.

• Current Profit Indicators
  : Net profit margin of 5.55%, operating profit margin of 4.74%, ROE of 6.97%[0]
• Future Profit Potential
  : The gross margin of software and services is far higher than that of hardware manufacturing. Once large-scale deployment is achieved, it will significantly improve the overall profit level

: XPeng Motors Chairman He Xiaopeng publicly made a bet that if XPeng’s VLA technology can reach the overall level of Tesla’s FSD V14.2 in Silicon Valley by August 30, 2026, he will set up a Chinese-style canteen in Silicon Valley[2]. This reflects the industry’s recognition of Tesla’s technological leadership.

: Competitor Rivian is also developing self-developed AI chips, planning to replace NVIDIA products in future models. However, its Autonomy+ service is priced at $2,500 or $49.99 per month, far lower than Tesla’s $8,000 or $99 per month[3].

The California DMV has asked Tesla to adjust its Autopilot promotion, arguing that the marketing term “Full Self-Driving Capability” is misleading and violates state laws[1]. Such regulatory challenges may affect the commercialization process of FSD.

Despite significant progress in FSD, it may still face challenges in complex long-tail scenarios. The “black box” nature of end-to-end models makes it difficult to understand and solve causal relationships[1].

As more traditional car companies and new players join the autonomous driving track, Tesla’s leading edge may face challenges.

Fact-based contrarian investment logic suggests that the market may underestimate Tesla’s huge potential to transition from a hardware manufacturer to an AI company. Key technological breakthroughs and the realization of unsupervised FSD mark a critical node in this transition.

1. Data Asset Value
   : Scarcity of massive real driving data
2. Technology Platform Value
   : Network effect of end-to-end AI models
3. Business Model Upgrade
   : From one-time sales to recurring service revenue
4. Ecosystem Advantage
   : Moat from hardware-software integration

Tesla’s valuation should no longer be based on traditional automotive manufacturing logic but on an AI platform company framework. With continuous breakthroughs in FSD technology and large-scale deployment of Robotaxi services, Tesla is expected to achieve a qualitative transformation from an electric vehicle manufacturer to the world’s largest AI autonomous driving platform company, which will be the core support for its long-term investment value.

[0] Gilin API Data
[1] EET China - “Tesla FSD to Reach Ultimate Form! Musk: Remove Safety Drivers from Front and Rear Seats, Unsupervised Version Basically Solved” (https://www.eet-china.com/mp/a459603.html)
[2] All-Weather Technology - “He Xiaopeng Challenges Musk” (https://awtmt.com/articles/3761278)
[3] Sina Finance - “Tesla Rival Rivian Develops AI Chips, Plans to Replace NVIDIA Products in Future Models” (https://finance.sina.com.cn/tech/roll/2025-12-12/doc-inhapfim7344312.shtml)
[4] Wikipedia - “Tesla Robotaxi” (https://en.wikipedia.org/wiki/Tesla_Robotaxi)