Unlike us mere mortals, time is usually on Tesla’s side. The launch of its robotaxi service last week has inverted that, and at a moment of particular weakness for the company.

When it comes to Tesla’s push for dominance in autonomous vehicles, the handful of Model Y robotaxis now offering paid rides in Austin, Texas, represents a milestone. But it is also a millstone because of how Tesla is doing autonomy and Chief Executive Officer Elon Musk’s long history of overpromising on its capabilities. Tesla’s pitch is that the vehicles it sells already have the hardware needed to be robotaxis and that its self-driving software, trained on a vast fleet of existing cars driven by unpaid beta testers, can handle virtually any situation. Yet the Austin launch has been defined less by its boundless potential and more by its boundaries, operating in a limited area, with invite-only customers and a “safety monitor” in each vehicle.

Pledging robotaxis everywhere and delivering, late, a vehicle that plies the streets of just south Austin with a free human doesn’t do much for credibility. But it also corrodes the thin justification for Tesla’s high stock price.

On generous assumptions, Tesla’s core EV business, generating 75% of gross profit but with falling sales, might be worth roughly $50 per share, only 15% of the current price. (Large auto manufacturers typically trade on single-digit multiples and even BYD Co., Tesla’s fast-growing Chinese rival, trades at only about 20 times. Let’s be generous and assume Tesla can restart growth in EV deliveries, plus fix its brand, and assume 30 times. Applying that to 75% of the consensus forecast for earnings over the next four quarters of $2.12, the EV bit is worth about $48. Tesla’s energy business accounts for most of the rest of the earnings. Putting that on a multiple of 20 to 40 times implies a valuation of about $10-20 per share.) Much of the remainder relates to expectations around self driving. RBC Capital, for example, ascribes 59% of its price target, or $181 per share, to robotaxis and a further $53 to monetizing Full Self Driving technology. Combined, that is a cool $815 billion based on double-digit multiples ascribed to modeled revenue — not earnings — 10 to 15 years from now because, after all, it relates to businesses that barely make money today.

Subject to revision, then, but that works to Tesla’s advantage. Consider: Over the past two years, Tesla’s EV business has stalled, its Cybertruck launch has flopped, a promised low-cost model remains elusive and earnings have slumped. Yet since Musk pivoted hard toward robotaxis and robots in early 2024, its multiple has more than doubled to around 140 times forward earnings. Multiples are numeric manifestations of faith. It has not mattered that Musk touted incoming robotaxis for years without delivering. With nearly two billion passenger vehicles on the world’s roads, the potential market for robotaxis is gargantuan and Tesla is bound to be a leader at some indeterminate, but undoubtedly lucrative, point in the future.

Faith doesn’t cope too well with reality, however, and that’s what last week’s robotaxi launch delivered. It is obvious that, having mocked rival Waymo’s cautious, city-by-city approach, Tesla is now emulating that as it begins its own operation. As of writing this, there is only one reported incident of a “safety concern” pertaining to a Tesla robotaxi on the City of Austin’s online dashboard. But federal regulators are already looking into instances where Tesla robotaxis appeared to violate traffic laws, captured on video.

Teething troubles, perhaps, but $800 billion-odd of notional value doesn’t leave much room for teething. In launching, Tesla has started the clock on demonstrating progress. The critical issue is how quickly it can grow this business; not just to bring in revenue but to prove underlying assumptions.

For example, one of Tesla’s main purported advantages is that its sensor-lite approach, eschewing systems like LiDAR, makes its robotaxis cheaper than the tricked-out cars operated by Waymo. But that only holds if Tesla scales up quickly since Waymo, now providing more than 250,000 rides per week, can depreciate its higher vehicle costs over many more paid miles. Meanwhile, the longer Tesla takes, the more time other competitors, like Amazon’s Zoox, have to establish themselves. In a market this new and dynamic, the range of potential outcomes is dizzying. A recent attempt by analysts at Goldman Sachs, modeling various fleet sizes and margins on a hypothetical Tesla robotaxi fleet in 2040, spat out values from $2.50 per share up to $81.75. Place your bets.

This spills into other aspects of the valuation. I noted previously that Ashok Elluswamy, Tesla’s head of Autopilot engineering, made an odd comment on the last earnings call suggesting that the Model Ys being used for the Austin launch had an added audio sensor. Last week, Business Insider reported that Tesla is building modified Model Ys for use as robotaxis, with added camera protection and a second telecommunications unit, citing unnamed sources (I contacted Tesla’s investor relations department for comment but received no response).

This matters because it appears to undercut the foundational premise that virtually all Tesla vehicles can be used as robotaxis. Apart from the costs that might incur, including to the brand, it wouldn’t help with another talked-about source of future profits; namely, licensing Tesla’s robotaxi technology to other automakers. This appears to be part of Waymo’s strategy, too, with the company having recently agreed to a tentative partnership with Toyota. It is notable, too, that shares of Mobileye Global, a provider of driver-assistance and autonomy technology to multiple automakers, jumped 25% last week despite Tesla’s launch (or perhaps because of it).

Above all, Tesla’s prior delays were forgiven on the premise that when its robotaxis did arrive, they would conquer all. Granted, a year from now, we may all be wowed at Tesla’s progress and thousands of robotaxis may be rolling around multiple cities. Yet the launch has done little to inspire confidence in that. More importantly, Tesla now no longer has the luxury of simply deferring the dream.

Bloomberg Opinion columnist Liam Denning covers energy.