RBC Capital analysts lowered their price target for Tesla (NASDAQ:TSLA) to $227 per share, down from $293 in a note Thursday, maintaining an Outperform rating on the stock.
This revision comes after the firm revisited its assumptions for Tesla's robotaxi business.
"We lower our TSLA robotaxi value and now allocate a bigger revenue share to Service Providers like Uber/Lyft," states the RBC Capital note. Analysts believe robotaxis will ultimately expand the total addressable market for automobiles but with more players involved.
RBC Capital adjusted their robotaxi calculations in two key ways. First, they lowered their price per mile assumption from $0.96 to $0.81, reflecting the economics of fleet operations and a 15% internal rate of return (IRR).
Second, they implemented a new revenue-sharing model, allocating 25% to service providers, 10% to software providers, 15% to OEMs (like Tesla) for vehicle leasing, and 35% to fleet operators to cover expenses and maintain a 15% IRR.
Previously, RBC Capital analyzed two scenarios: Tesla owning the entire robotaxi operation and fleet operators using Tesla software with another manufacturer's vehicle.
They've now expanded this to four scenarios, including service providers using either Tesla's app or another company's app. Under this revised model, Tesla would capture 100% of revenue in a fully self-owned scenario but only 10% if another manufacturer's vehicle and a service provider's app were used.
"When robotaxis reach mainstream global usage (which we see happening closer to 2040), there will likely be multiple software providers, fleet operators, and OEMs making these purpose-built vehicles," the note explains.
RBC Capital now sees robotaxis contributing 52% of their Tesla valuation, down from a previous estimate of 68%. FSD (Full Self-Driving) technology is now seen contributing 27%, followed by Megapacks at 15% and core car sales at 6%.