Tesla Hit $500 Billion in Market Cap, Elon Musk Expects Self-Driving Cars Would Reach That Level

The electric-vehicle maker Tesla's market cap soared up to $520 billion on Tuesday. Elon Musk, the company's CEO, says he predicted that autonomous driving would boost market capitalization to $500 billion last year.

Tesla refines its self-driving software and has just released a beta version to a limited number of clients. During an investor call in May 2019, Musk claimed when Tesla's market cap was less than $45 billion, as per CNBC. It struck many as audacious. But the automaker's market cap skyrocketed more than 11-fold then and zoomed past the CEO's prediction.

In 2015, the Tesla chief projected his company's market value could rise to $700 billion by 2025. According to Business Insider, even though Tesla's autonomous vehicles are still a work in progress, on Tuesday, its market cap jumped to $520 billion.

In July, Tesla's CEO said that he assumes the company to reach "basic functionality" for its self-driving cars at the end of this year. The carmaker began releasing the beta version of Tesla's self-driving software to choose clients in October.

In a Twitter post earlier this month, Elon Musk updated that software containing a raft of "fundamental improvements, which are both essential bug fixes and entire new areas of functionality."

The CEO floated to a bigger market cap for Tesla amid earnings cap in February 2015. Musk calculated that if his company continued growing revenue by 50% for ten years, Tesla's stock traded 20 times earnings and achieved a 10% earnings margin. It would be worth about $700 billion, the same as Apple's market value today.

Read also: Elon Musk Goes Viral Over COVID-19 Testing After Claiming He Tests Both Positive and Negative

In less than six years, Tesla's market value is more than $500 billion; the company is easily achieving Musk's prediction for 2025.

It's all about driverless

Musk described Tesla's existing solar, energy storage, and electric vehicle business lines as a backstop of worth to the business' in the new driving era, as per the two investors who heard the call.

Musk said that competitors, including Alphabet's Waymo and GM's Cruise, couldn't catch up as Tesla has a fleet of connected cars on the road and a proprietary chip.

Hundreds of thousands of Teslas are on the road constantly gathering data and sending it back to the company's servers that would help Tesla to improve and advance its Full Self-Driving and Autopilot systems.

Meanwhile, Tesla's self-driving computers are exclusive to Tesla and allegedly use less power than offerings from competitors like Nvidia.

Musk reiterated that unlike nearly any other car on the market, Teslas could be upgraded "over-the-air" with new software-enabled features and functionality. In three years, Tesla will be worth $150,000-$250,000, as per Elon Musk.

Besides, he said that a full-self-driving upgrade would increase Tesla's value by five times.

Next year, Tesla assumes to have a million vehicles on the road that can function as "robo-taxis," said Musk in a statement made at Autonomy Day and on Tesla's Q1 earnings call.

Each car could do 100 hours of work per week for its owner, making money as a robot-taxi, Musk told the investors.

Read also: Tesla Model 3 Yellow Taxi Cabs Will Ease Your Commute in New York