Tesla RoboTaxi Impresses Wall Street: TD Cowen Reaffirms $509 Target After 40-Mile Test

TD Cowen has maintained its Buy rating on Tesla stock with a $509 price target after analysts took three RoboTaxi rides covering nearly 40 miles in Austin. We have been tracking Tesla’s autonomous ambitions since the June launch, and this marks one of the first instances of Wall Street analysts conducting hands-on due diligence in the actual vehicles.

The investment firm paid $1.08 per mile for approximately two hours of autonomous rides, describing the experience as “impressive all around.”

Perhaps more significantly, TD Cowen believes Tesla is on track to remove safety monitors from the Austin fleet by year-end, a milestone that would put the company on par with Waymo’s fully unsupervised operations.

What TD Cowen Observed

The analyst rides were not conducted on simple suburban routes. TD Cowen specifically noted that the autonomous system handled two complex scenarios “very well”: emergency vehicles and a construction site.

These edge cases represent some of the most challenging situations for self-driving systems. Emergency vehicles require the car to identify sirens, determine direction, and safely yield. Construction zones demand real-time navigation around unexpected obstacles, lane closures, and human flaggers.

Tesla’s camera-only approach, which eschews the expensive lidar sensors used by Waymo, appears to be performing at a level that satisfies institutional investors.

Pricing Advantage Over Competitors

At $1.08 per mile, Tesla’s RoboTaxi service significantly undercuts the competition.

Waymo currently charges approximately $2 per mile in Austin, with prices fluctuating based on demand and time of day. An equivalent 11-mile trip that costs roughly $13 with Tesla would run between $22 and $26 with Waymo.

Uber pricing in Austin ranges from $1.50 to $2 per mile depending on vehicle type and surge pricing, and that does not include tips for human drivers.

Tesla’s cost advantage stems from its vertically integrated approach. The company manufactures its own vehicles, develops its own chips, and trains its AI on data from millions of Tesla vehicles worldwide. TD Cowen projects the upcoming Cybercab could achieve operating costs as low as $0.30 per mile, which would make autonomous rides cheaper than personal vehicle ownership.

The Path to Unsupervised Operations

Tesla CEO Elon Musk stated in September 2025 that “there should be no safety driver by end of year.” TD Cowen’s assessment suggests the company is actually delivering on this timeline.

Currently, Tesla employs a dual-monitoring system in Austin. Safety monitors sit in the passenger seat for city rides and move to the driver’s seat for highway trips, where they can intervene if needed.

The removal of these monitors would represent a fundamental shift. Tesla’s Austin fleet has accumulated over 250,000 miles of autonomous driving, while the Bay Area fleet has logged more than one million miles.

Musk has outlined plans to expand RoboTaxi operations to 8-10 metro areas by year-end, including Nevada, Florida, and Arizona. New markets will initially launch with safety monitors before transitioning to fully unsupervised operations.

Wall Street Consensus Building

TD Cowen is not alone in its bullish assessment.

Stifel recently raised its Tesla price target to $508, citing progress in Full Self-Driving software and the robotaxi rollout. The firm expects Tesla’s fleet to expand into 8-10 major metropolitan areas by the end of 2025.

Wedbush analyst Dan Ives has been even more aggressive, raising his price target to $500 while calling the RoboTaxi launch the start of a “golden era of autonomy.” Ives projects that scaling the robotaxi business could add $1 trillion to Tesla’s market value.

Morgan Stanley maintains an $800 price target, the highest on Wall Street, driven largely by autonomous driving potential.

EVXL’s Take

The shift from “if” to “when” has now become a question of “how fast.”

When we covered Tesla’s Austin RoboTaxi launch in June, skeptics dismissed the $4.20 flat-fee rides as a publicity stunt. When Benchmark raised its target to $475 shortly after, critics pointed to regulatory hurdles and Musk’s history of missed deadlines.

But here we are in December, and Wall Street analysts are actually riding in the vehicles, paying real fares, and coming away impressed enough to maintain buy ratings with significant upside targets.

The $1.08 per mile pricing is particularly notable. This is not promotional pricing or a loss-leader strategy. It represents Tesla’s actual cost structure advantage over competitors who rely on expensive sensor suites and third-party vehicle partnerships. We highlighted this dynamic back in April when Musk slammed Waymo’s costly approach, claiming Tesla vehicles cost 20-25% of a Waymo.

The emergency vehicle and construction site scenarios that TD Cowen observed are exactly the edge cases that have plagued autonomous systems for years. Tesla’s ability to handle these situations with a camera-only system validates the company’s contrarian bet against lidar.

That said, we remain cautious about the timeline for removing safety monitors. Musk has a long history of optimistic predictions, from the “1 million robotaxis by 2020” promise to numerous FSD release delays. The difference now is that third-party observers are validating progress in real-time.

The real test comes when Tesla attempts to scale beyond Austin’s relatively simple road network to denser urban environments. The California expansion already required stricter supervision and higher pricing, suggesting the technology still has limitations in more complex markets.

For investors, the TD Cowen report represents something rare: actual due diligence rather than spreadsheet projections. When analysts put themselves in the passenger seat of a driverless vehicle and emerge impressed, that carries more weight than quarterly earnings speculation.

What do you think about Wall Street’s growing confidence in Tesla’s autonomous future? Share your thoughts in the comments below.