Tesla’s Hope Premium—and Why the Bet Looks Different Now

There’s a point where valuation stops being about execution and starts being about belief.

For a long time, Tesla earned the right to be valued aggressively. Its first trillion-dollar moment wasn’t driven merely by narrative enthusiasm. It was anchored in observable execution. Tesla solved mass-production EV manufacturing, built scale others didn’t match, and posted operating margins that were almost comical by auto-industry standards.

That era is over.

What’s replaced it is something I’ll call the Hope Premium—a valuation increasingly shaped by what Tesla might become, not by what it is delivering today or by what seems reasonably provable about its future. That doesn’t make the hope irrational. But it does materially change the nature of the bet investors are making.

By 2018, Tesla had emerged from Model 3 “production hell” and demonstrated that mass-market EV manufacturing was not only possible, but scalable and profitable.

Several things were coming together at once. Tesla had solved mass production, moving beyond the chaos of the Model 3 ramp-up. EVs appeared poised to displace internal-combustion vehicles faster than most expected. Legacy automakers were still hesitating. Tesla was proving it could make EVs and earn meaningful margins doing it. The Model Y was on the horizon. And full self-driving appeared, at the time, to be progressing rapidly toward real-world deployment.

In that context, aggressive extrapolation made sense.

Investors weren’t paying for distant abstractions. They were extending visible execution forward. As Tesla’s valuation climbed from tens of billions into the hundreds of billions, it was still tethered to observable progress in manufacturing, demand, and profitability.

Back then, Tesla didn’t ask investors to believe in an entirely new identity.

It asked them to look at what it was already doing—and project forward.

By 2021–2022, Tesla’s valuation had expanded dramatically—cresting above $1 trillion—and the underlying story began to change.

Not all at once, but meaningfully.

Vehicle growth rates slowed. Automotive margins compressed. EV demand became more price-sensitive. Competition—especially from China—intensified. Elon Musk’s personal brand became inseparable from Tesla’s corporate brand. And full self-driving remained perpetually “just around the corner,” with timelines repeatedly pushed out.

None of this erased Tesla’s achievements. But it altered the risk-reward balance at a much higher valuation.

The company that once rewrote the rules of automotive profitability was now being valued not on the future of the auto sector, but on a far more expansive set of ambitions. Markets are rewarding Tesla today even with that next act still unproven. What’s less clear is whether the current valuation reflects disciplined forward-looking analysis—or confidence that Tesla’s past success will naturally repeat itself across entirely new categories.

That distinction matters.

For context, I was a Tesla shareholder from late 2018 to mid-2022. That reflects both my belief in the company’s early automotive execution and why I’m comfortable questioning the valuation logic today.

When the original thesis weakens, a new one often takes shape.

Suddenly, Tesla became something other than an automaker.

Instead, the future became centered on robotaxis, humanoid robots (Optimus), and a broader idea Tesla now calls “sustainable abundance.”

In its latest Master Plan, Tesla lays out a vision in which AI, robotics, and energy dramatically reduce—or even eliminate—scarcity itself.

It’s a compelling story.

And it may ultimately be directionally right.

But it carries a much heavier burden of proof that Tesla will be the company that dominates “sustainable abundance”than the early days of the EV thesis ever did.

A growing share of Tesla’s valuation now rests on robotics and robotaxis. This is where comparisons to Tesla’s early EV success deserve closer scrutiny.

A common bull argument is that EVs have simply been the laboratory. Much like books were to Amazon, cars are viewed as the training ground where Tesla has mastered vision systems, AI, and manufacturing—making leadership in robots and autonomy a natural next step.

That may prove directionally correct as well.

But unlike early EVs, Tesla is no longer operating in a vacuum.

In robotaxis, Waymo already has an operational and regulatory lead. In robotics, serious industrial players are deploying humanoid robots inside real factories today. These are not demos. They are productivity tools.

This matters because dominance in these markets won’t be determined by ambition alone.

Access to better technology doesn’t automatically translate into owning the economics. Increasingly, those tools are becoming available across the industry. The open question isn’t whether Tesla can compete in robotics and robotaxis—it’s why investors assume Tesla will dominate them.

That assumption shows up clearly in the robotaxi numbers.

Analysts have talked about a 24-billion-mile addressable robotaxi market, with Tesla capturing roughly 5 billion of those miles—about a 21% global share.

Where do those numbers come from?

Why should Tesla capture over one-fifth of global robotaxi miles—especially when it isn’t the current leader?

Waymo already operates fully driverless fleets in multiple cities. Uber controls global demand aggregation without owning vehicles at all—and in a robotaxi future, it may not need to own the autonomous vehicles operating on its network either. Meanwhile, AI platforms enabling autonomy are becoming more broadly available across the industry.

None of this precludes Tesla from succeeding.

It simply complicates the dominance assumption embedded in the valuation.

To be clear, dismissing Tesla outright has been a losing trade. Markets can remain optimistic longer than skeptics expect, and Tesla has repeatedly benefited from that dynamic.

Tesla has already done what many said was impossible—twice. First, it made EVs desirable. Then it made them profitable at scale. Skepticism around robotaxis and Optimus today echoes the skepticism that once surrounded the Model 3.

There’s also a serious manufacturing argument. Unlike autonomy-first competitors, Tesla designs and builds its own vehicles. If robotaxis become a real business, Tesla could be the lowest-cost producer of the robotaxi itself, with purpose-built platforms optimized for utilization, durability, and cost per mile.

That vertical integration—manufacturing, software, electronics, and AI hardware—is real and differentiated.

Those are not trivial advantages.

But possibility isn’t probability.

The EV story worked in part because competitors weren’t fully engaged. Robotics and autonomy are already crowded categories. Manufacturing advantages matter—but advanced technology is also increasingly available to competitors.

Even in EVs, dominance proved temporary. BYD now leads in volume, a reminder that industrial leadership rarely stays fixed.

Tesla may succeed again.

But today’s valuation doesn’t price in just success.

It prices in multi-category dominance—on Musk’s timetable.

That’s a very different bet.

Tesla is no longer being valued primarily on what it has proven.

It’s being valued on what investors expect to be true.

As someone who believed early because execution justified belief, I’m more cautious when belief itself becomes the primary justification.

That doesn’t make the bulls wrong.

But it does make the questions worth asking.