$Tesla(TSLA)$ launched its first U.S. robotaxi service, marking a major step in Elon Musk’s autonomous vehicle ambitions. With plans to scale to 1,000 cars and 1 million AVs by 2026, Tesla is well-positioned in a fast-growing $38.7B market.
Investors may consider Tesla LEAP calls (e.g. Jan 2026 $280) for long-term upside or bull call spreads (e.g. $350/$410) for defined risk and cost control.
From EVs to AI: Tesla’s Robot Era Begins
$Tesla(TSLA)$ on Sunday rolled out its first robotaxi service in a U.S. city, a key part of Chief Executive Elon Musk's ambitious plans for autonomous vehicles. The launch caps a decade of Musk's promises around autonomous-vehicle technology.
Musk said that it would ramp up to about 1,000 vehicles and become available in other U.S. cities in the next few months.
The program will use regular Tesla Model Y vehicles equipped with cameras and sensors. The fully autonomous Cybercab, unveiled last year, is still under development. "These are unmodified Tesla cars coming straight from the factory," Musk tweeted recently.
He went on to reaffirm plans to have 1 million self-driving Tesla vehicles on roads by the end of next year, a business model he has likened to a combination of Uber Technologies Inc. $(UBER)$ and Airbnb Inc. $(ABNB)$.
The global robotaxi market is projected to grow from $1.1B in 2025 to $38.7B by 2035 (CAGR: 40.2%), driven by AI advancements, regulatory shifts, and urbanization trends. Tesla’s vertical integration, combining FSD and in-house manufacturing, positions it as a frontrunner in the robotaxi race.
Dan Ives Maintains Outperform Rate With a $500 PT
Rides around Austin, Texas in Tesla ’s robotaxi exceeded high expectations set for the event, according to well-known Wedbush analyst Dan Ives. “Going into it, we expected to be impressed,” Ives wrote to clients on Sunday after attending the electric vehicle maker’s automated taxi launch event.
Ives called the robotaxi launch the “beginning” of Tesla’s artificial intelligence story. Once there are enough of them on roads, he said the taxis could be able to start communicating with each other to create an even better travel experience. “Overall, these Robotaxis exceeded our expectations and offered a seamless and personalized travel experience that has lit the spark for autonomous driving,” Ives said. Ives maintained his outperform rating.
His $500 price target is a Wall Street high and implies 43.4% upside to Monday’s closing level, Shares rose another 2% in overnight trading on Tuesday. However, the stock has fallen more than 13% in 2025.
Option Strategy
LEAP Call Options (1-2 Year Horizon)
Strategy: Buy deep ITM call (e.g. Jan 2026 $280 call)
Reasons:
Leverages TSLA's upside with 70-80% delta exposure
Minimal time decay (theta) vs short-dated options
Lower IV exposure than nearer expirations
Risk:
Full premium loss if TSLA < strike at expiration
Bull Call Spread (6-12 Months)
Strategy:
Buy ATM call (e.g. Dec 2025 $350 call)
Sell OTM call (e.g. Dec 2025 $410 call)
$TSLA Vertical 251219 350.0C/410.0C$
Why:
Limits upfront cost (credit from short call)
Defined risk profile
Benefits from moderate upside
Risk:
Capped gains above short strike
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