Robotaxis: Capturing $34 Trillion in Market Value

Until a decade ago, robotaxis seemed like science fiction. But not any more; they have finally become a reality, paving the way for a smarter and safer future. According to ARK Invest’s latest research, the robotaxi ecosystem is projected to generate approximately $34.8 trillion in enterprise value by 2030.

Robotaxis are autonomous, self-driving electric vehicles (EVs) that offer on-demand pickup and drop-off services without a human driver. These vehicles use a variety of technologies, including cameras, sensors, radar, LiDAR, and artificial intelligence, to navigate roadways autonomously. They work similarly to ride-hailing services like Uber (UBER -3.6%) and Lyft (LYFT -2.9%), where passengers hail a vehicle via an app, and the robotaxi, sans driver, transports them to their destination.

Currently, robotaxis aren’t entirely autonomous. There are levels of autonomy in robotaxis, with Level 0 having no automation, Level 1 offering basic driver assistance, and Level 2 offering partial automation like Tesla’s Autopilot. Another level up (Level 3), and the system can handle all driving tasks, but the driver still needs to be ready to take over when requested. Full automation comes at Level 5, where the vehicle is capable of full autonomy across all environments and conditions, with no need for human oversight. This remains a significant future milestone. Level 4 is where we are currently; it’s fully autonomous but operates within defined operational domains. This is being actively deployed in driverless robotaxis today.

To ensure safety and reliability for public use, robotaxis are undergoing rigorous testing. Of course, accidents still occur, as seen with Cruise, whose operations were suspended and restructured by General Motors (GM +1.71%) after it was banned following a series of incidents. Other self-driving cars have also been involved in fatal accidents, but it is notable that human error accounts for about 94% of traffic accidents, according to NHTSA data.

Equipped with advanced technology, autonomous vehicles can reduce human error and be “safer” than human drivers under certain conditions. They can also relieve traffic congestion by reducing personal car ownership, which, combined with robotaxis’ eco-friendly features like promoting carpooling and minimizing idle time, can significantly reduce carbon emissions.

While safety concerns persist and public perception remains wary, robotaxis are already available in many parts of the world. For instance, in the US, people in major cities—including Phoenix, San Francisco, Los Angeles, Austin, and Atlanta—can request limited fully autonomous rides. Meanwhile, China is leading global robotaxi coverage, with several providers operating in defined coverage zones across multiple cities.

As Robotaxis experience massive investments, commercial deployments, and strategic expansion, ARK Invest has taken a deep dive into autonomous vehicles in its flagship research report ‘Big Ideas 2026’ as the transformative technology that can reshape the economy over the coming decade.

In this year’s report, the asset management firm is even more bullish on the robotaxi sphere than it was last year, when it projected the industry to generate $28 trillion in enterprise value. Cathie Wood’s ARK notes that those who join this revolution early “should enjoy the higher prices associated with early adoption.” Let’s take a look at ARK Invest’s bold views of the autonomous ride-hailing service sector and its long-term economic impact.

The Platform Economy: 98% Winner-Take-Most
ARK Invest’s Big Ideas for 2026 covers autonomous vehicles as one of the most disruptive technologies, which can catalyze growth by leading to an 8x increase in miles utilization per vehicle and driving a shift from driving to paid service. It sees a multi-trillion-dollar opportunity from owning and operating autonomous ride-hail markets at scale.

According to research forecasts, the robotaxi ecosystem could generate as much as $34.8 trillion in enterprise value by 2030. This ecosystem involves autonomous electric car manufacturers, fleet operators, and autonomous technology providers. However, these participants aren’t expected to capture this value equally. ARK Invest expects technology providers to capture the lion’s share of this value, forecasting $34.1 trillion in enterprise value from those that develop, manufacture, and supply systems and software that enable vehicles to operate, navigate, and perform tasks without continuous human intervention.

As for fleet owners—companies that own, manage, and operate these vehicles, such as Uber, Lyft, Moove, Avis, Bolt, and Grab—they stand to gain a mere $500 billion in enterprise value and $400 billion in net revenue, according to ARK Invest. The research projects that automakers will be the least advantageous of all, generating $200 billion in enterprise value and net revenue each. Automakers’ value share accounts for just 1% of the total enterprise value, the same as fleet owners, whose revenue share at 16% is double that of car manufacturers such as Toyota (TM -0.07%), Hyundai, Geely, Renault, Chery, Nissan, and Lucid.

When it comes to the revenue potential of autonomous technology providers, it stands at $1.9 trillion, accounting for 76% of the entire ecosystem’s economics. But it’s the value-generation share that is far more critical at 98%, presenting a massive economic opportunity for the likes of Tesla (TSLA +0.04%), Baidu, Apollo Go, Waymo, WeRide, Pony.ai, Zoox, Wayve, and others. These are the companies building and controlling the self-driving system. As robotaxis proliferate, those guided by superior data and algorithms will be best positioned to scale, stated ARK. The company that can achieve full autonomy and scale it will capture an outsized economic share. According to ARK: “Full Self-Driving (FSD) has positioned Tesla well.”

Robotaxis and the Collapse of Urban Transit Costs
The key promise for autonomy is lower transport costs. By eliminating the need for human drivers, which are one of the biggest expenses in ride-hailing, robotaxis are expected to halve operational costs by 2030. Already, driverless robotaxis have cut transportation costs with fares 30% to 60% lower than traditional taxis in cities like Wuhan.

While robotaxis have just begun to appear on the roads and people are still afraid of riding in a self-driving vehicle, though sentiment is improving, ARK Invest believes that once costs come down, demand will increase.

$0.25 per mile is the economic tipping point, per ARK projections, at which owning a car becomes irrational for city dwellers, creating new and explosive demand for robotaxis. Once that happens, robotaxis will reshape behavior, shifting from personal driving to paid service, allowing time spent driving to be used for work or leisure.

For now, ARK’s model estimates that Waymo’s 5th-generation robotaxi will have a cost basis exceeding $1 per mile in 2025, including depreciation, taxes, insurance, energy, operations, maintenance, and parking. The model suggests that using Tesla’s refreshed Model Y platform could reduce that cost by roughly 35%. ARK expects such modelled cost reductions to continue as vehicle utilization and efficiency improve. At scale, it projects that Waymo 6th Gen will cost about $0.25 and Tesla Cybercab will cost about $0.20. Vehicle costs will dominate unit economics during early commercialization, and vehicle utilization rates will drive per-mile costs down at scale.

The Humanoid Multiplier
Humanoid robots are making a lot of noise, picking up objects, running, climbing, performing complex dance moves, working in warehouses, and being tested in industrial plants, demonstrating remarkable precision, stability, and agility in daily tasks. But while impressive, humanoid robots still lack widespread adoption despite gaining significant mainstream traction. That’s because they are far more complex than robotaxis.

Robotaxis represent a high-complexity autonomy problem, but humanoid robots multiply that complexity by orders of magnitude. While robotaxis primarily deal with structured environments and constrained motion, humanoids must navigate unstructured environments, near-field object manipulation, semantic reasoning, and extreme adaptability.

Robotaxis offer the simplest path to full autonomy while generating massive real-world data that can help build the technological foundation for these robots. By mapping the compute required for Tesla Full Self-Driving (FSD) to performance gains, ARK projects that the company’s humanoid robot, Optimus, can overcome the complexity ratio and achieve human-level task performance around 2028, provided hardware continues to advance and AI compute capacity expands.

In a recent interview, Wood noted the technical difficulty of enabling a robot with human-like flexibility to operate reliably compared with self-driving taxis. This means humanoid robots will gradually improve through innovative updates, and even then, it will take a lot of time for them to reach close to human capabilities. But once achieved, ARK says these humanoid robots can have a major impact on GDP. A single humanoid robot will have a $62,000 per year impact, and one such robot in every US household can have a $6 trillion impact, representing a 20% increase in GDP. “If humanoids were to penetrate 80% of US households over five years, GDP growth could accelerate from 2-3% per year to 5-6% per year,” projects ARK.

Why Robotaxis Will Dominate Urban Mileage
Today, Uber accounts for less than 1% of US urban mileage. To accommodate current ride-hail volume, it will need about 140,000 robotaxis operating at high utilization rates, estimates ARK. Interestingly, robotaxis have already begun taking share from traditional ride-hail services, with Alphabet’s Waymo rising from near zero to 20-25% in San Francisco. Waymo is all set to overtake Lyft there, while Uber’s share still sits above 50%, though it is slowly declining.

Modeling robotaxi demand across major US cities, ARK estimates that approximately 24 million robotaxis—less than 10% of cars on the road today—would be enough to accommodate most urban driving.

These projections are based on robotaxis’ high utilization rates, which substantially exceed the efficiency of personally owned vehicles. Private cars sit idle about 95% of the time, whereas robotaxis can operate almost continuously. This translates to a smaller, dedicated fleet covering more ground. As the technology matures, the cost to operate these ride-hail vehicles is projected to drop even further, far below the cost of private car ownership, driving urban demand. Once robotaxis dominate urban mileage, this could lead to reduced parking demand, less congestion, and less pressure on public transit systems. Notably, the firm finds Tesla alone with the production capacity that can build fleets at this scale and handle all the miles in top ride-hail cities.

Spotlight: Tesla (TSLA)
Given that ARK Invest expects autonomous technology providers to be the biggest beneficiaries of the immense growth expected over the next 4 years, Tesla emerges as the clear winner. Tesla has already begun testing its robotaxi service in a couple of US cities. In Austin, Texas, the service comes with human safety supervisors, though plans to remove safety drivers are underway within months. In San Francisco, its services come with drivers at the wheel, as the company hasn’t obtained the required permits for fully autonomous operation.

Tesla has an estimated few hundred robotaxis active, with plans to add seven new operating areas this year. Its approach to autonomy relies heavily on the Full Self-Driving (FSD) software, allowing a vehicle to navigate, steer, change lanes, and park under active human supervision. While it promises a future where the car handles all driving, the currently available system still requires human attention.

But while full autonomy is a long way off, the software has already helped Tesla build a substantial data moat from billions of miles of real-world driving data, giving it a significant competitive advantage. This supports ARK’s high long-term valuation scenarios for Tesla that incorporate robotaxi dominance. The software has logged 6.7 billion miles (more than 10 billion kilometres) globally as of late 2025. This massive pool of real-world data enables Tesla’s system to better anticipate danger and reduce collision risk.

With Tesla expanding the software rollout worldwide—including Australia, New Zealand, South Korea, select European countries, and soon China—it will further boost FSD usage and data collection. Active FSD subscriptions are currently at 1.1 million users, up from 400,000 in 2021. FSD is experiencing strong user adoption, recording 38% year-over-year growth. In comparison, Tesla’s vehicle delivery has only grown by 22%. In fact, Tesla reported a 16% drop in deliveries to 418,227 in its fourth-quarter results, marking the second straight annual drop.

Company revenue fell by 3% YoY to $24.9 billion. This includes $401 million in regulatory credit revenue and $17.7 billion in auto revenue, both declining by 10% and 11% respectively. Its energy generation and storage segment continues to grow, with revenue surging 25% to $3.8 billion. Its service revenue also increased 18% to nearly $3.4 billion. With Tesla’s core auto business struggling while the software business grows, it makes sense that the company is shifting focus to robotaxi and robotics.

As Lars Moravy, Tesla’s vice president of vehicle engineering, noted: “You have to start thinking about us as moving to providing transportation as a service more than the total addressable market for the purchased vehicles alone.” Tesla will stop producing luxury Model S and X vehicles and convert one factory into a manufacturing plant for Optimus, forecasting production of 1 million robots a year. The company will also begin producing robotaxis without steering wheels or pedals in the second quarter of this year.

“We’re really moving into a future that is based on autonomy,” Musk noted during the earnings call. To actualize these autonomy goals, Tesla plans to spend over $20 billion in capital expenditures this year. However, its operating cash flow has fallen by 21% to $3.8 billion, while generating $14.7 billion for the full year. The company’s expansion plans are aggressive, but according to Moravy, Tesla is the “only company capable of scaling at the rate that is needed for the tsunami of autonomy that is coming.”

Tesla’s strategic move towards robotaxis and humanoid robots points to the company sharing ARK Invest’s bold predictions. ARK remains bullish as a premier AI and robotics play. In 2024, the firm published its price targets for Tesla stock, which it sees valued at $2,600 by 2029. ARK’s bullish case is $3,100 per share, and its bearish case is $2,000.

As of writing, TSLA shares are trading at $420, down 4.29% YTD but up 6.38% over the past year. It has an EPS (TTM) of 1.08 and a P/E (TTM) of 400.23.

In December 2025, TSLA shares approached a peak of $500 per share, recovering from their April low of about $221. While shares are far from ARK’s targets, Wood believes those numbers are within reach. In a recent interview, she noted that buyers have “stayed away from Tesla because they have characterised it as an auto company,” but Tesla is actually an autonomous taxi network.

A vast majority of Tesla’s valuation (90%), Wood believes, is in the robotaxi opportunity and its ability to transform into a self-driving service platform. The robotaxi opportunity has a very high margin (80% plus), in stark contrast to the low margin (15%) of automobiles, which belong to the hardware industry. On top of that, robotaxis are “the largest embodied AI opportunity out there. We think Tesla will lead the space in the platform part of the opportunity,” she said.

Click here for a list of five leading autonomous vehicle startups.