Dan Ives keeps $500 Tesla target, calls it physical AI play

Ives's note rests on a specific claim about what Tesla has assembled internally: a fleet of several million vehicles generating driving data, the AI models and in-house chips that learn from that data, and the manufacturing scale to build the products. He contrasts this with what he describes as most AI and robotics efforts still assembling those pieces from partners. His argument is that valuing Tesla mainly as an automaker prices the fleet itself rather than the platform built on top of it.

The operating numbers he cites cut both ways. Full Self-Driving's subscription attach rate is above 55% on new North American EV sales, and the robotaxi service has accumulated paid miles approaching 2.5 million across six US cities. But Tesla's second quarter update removed both the Cybertruck and Optimus from its 2026 volume production list, and Ives notes Tesla itself expects about 2,500 vehicles in Nevada in year one — half of what its permit allows. Cybercab production has begun and the vehicle is carrying paying passengers in Austin, yet only 45 Cybercabs are authorized for driverless operation in Texas.

Regulatory scrutiny adds a further variable. NHTSA issued a Special Order on Cybercab's self-certification, and Tesla's sworn response was due Sept. 30. No decision has been announced, but an adverse finding could confine Cybercab's operational area — a risk that sits alongside Ives's view that the fleet count is the number to watch as unsupervised vehicles move from dozens toward thousands.