Tesla's Robotaxi Strategy Gains Wall Street Support Amid EV Headwinds

Tesla is navigating a challenging operational period as it contends with a significant decline in share price, currently trading 29% below its peak. The company missed first-quarter delivery expectations for the second consecutive time, with growth slowing to just 6% amid the expiration of federal tax credits and intensifying competition in the electric vehicle sector. Despite these headwinds, Wall Street analysts are pivoting their focus toward Tesla's autonomous driving ambitions. Bank of America analyst Alexander Perry recently reinstated coverage with a price target of $460, implying a 33% upside from the current share price of $345. Perry argues that Tesla's 'vision-only' approach—relying exclusively on cameras rather than expensive lidar or radar systems—provides a scalable and durable cost advantage over its competitors. While Alphabet's Waymo currently leads in commercial deployment across 11 U.S. cities, Tesla is operating robotaxi services in Austin and San Francisco. CEO Elon Musk has indicated that the service area could expand to dozens of major cities, potentially covering between a quarter and a half of the United States by the end of the year. Morgan Stanley analyst Andrew Percoco suggests that the successful rollout of a robotaxi network could create a 'flywheel' effect, ultimately stimulating demand for Tesla's core vehicle business. This strategic shift toward AI and robotics comes as the company seeks to recover from a 2025 that saw it lose its position as the global leader in electric car sales due to tariffs and shifting demand.