At ~US$490, Tesla’s valuation is no longer anchored to the auto cycle. It is anchored to execution on optionality. The most critical assumptions embedded at this level are the following:

1. Robotaxi commercialisation moves from promise to scale

The market is pricing in not just technical viability, but regulatory approval, safety validation, and fleet-scale deployment within a credible timeframe. Testing without safety drivers is symbolically important, but valuation assumes meaningful revenue contribution, not pilot headlines.

2. Software-like margins materialise

Tesla is implicitly valued as a platform, not a manufacturer. That requires sustained high-margin revenue from autonomy, subscriptions, and services. If margins remain auto-like, the multiple is difficult to defend.

3. Capital discipline improves alongside growth

Investors are assuming Tesla can fund autonomy, AI compute, and new platforms without structurally diluting free cash flow. Heavy capex with delayed monetisation would challenge this assumption.

4. Competitive moat holds against Big Tech and China

The valuation assumes Tesla maintains a lead in real-world data, cost structure, and AI iteration speed, despite competition from Waymo, Chinese EV makers, and potential regulatory fragmentation.

5. Macro does not turn hostile to duration assets

At this price, Tesla behaves like a long-duration asset. Higher real yields or a sustained risk-off regime would compress multiples regardless of operational progress.

Bottom line

US$490 prices Tesla as a future mobility and AI infrastructure winner, not merely the best EV company. Any slippage in autonomy timelines or margin transformation would matter more than near-term delivery numbers.