It’s the ‘most important chapter ever for Tesla’

With the saga of Tesla (TSLA) CEO Elon Musk’s $1 trillion pay package behind it, bulls like Wedbush’s Dan Ives believe the automaker’s AI future is where investors should be looking.

“In my opinion, it’s going to be the most important chapter ever in Tesla’s story,” Ives said from the Yahoo Finance Invest event in New York.

Ives, who has called passage of Musk’s pay package a “bright green light” for Tesla’s AI and autonomous tech plans, has an Outperform rating on the stock and a Street-high $600 price target.

Ives said the first order of business for Musk and Tesla is self-driving and robotaxis.

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“You have to have the understanding of what Musk and Tesla are trying to do here,” Ives said. “They’re building out the AI future, autonomous. I mean, they’re going to own 80% of the autonomous landscape, in my opinion, over the next decade.”

Tesla is currently testing its robotaxi service in Austin, Texas, and the San Francisco Bay Area, though with safety drivers in place. Musk said at Tesla’s recent shareholder meeting that Austin’s robotaxi safety drivers would be removed by the end of the year. He added that Miami, Dallas, Phoenix, and Las Vegas will be the next cities to test Tesla’s robotaxi service.

Tesla’s purpose-built robotaxi, the Cybercab, will begin production in April of next year, Musk said.

Ives sees the autonomous tech advancing the development of Tesla’s Optimus humanoid robots.

“[Tesla’s] Optimus, that’s what you’re playing for. It’s less about [vehicle] deliveries. It’s more about the AI future. You have to be patient,” Ives said, cautioning investors that the time horizon is measured in years, not months.

Tesla revealed at the shareholder meeting that it will build a 1 million-unit Optimus production line at its factory in Fremont, Calif., and eventually a 10 million-unit line at Giga Texas in Austin. The company provided no timeline; however, Optimus is in pilot production at Fremont.

Part of Musk’s compensation requires him to deliver 10 million active FSD subscriptions, 1 million Optimus robots, and 1 million robotaxis, among other things, to receive the full package.

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.