Part 4/12:
One of the thesis's cornerstones is Tesla's impending robo-taxi network. Arc considers this a key driver, expecting it to generate 60% of Tesla's expected value by 2026. The model anticipates that more than half of Tesla’s earnings before depreciation and amortization (EBITDA) in 2026 will stem from software-driven ride-hailing services, not just hardware vehicle sales.
Tesla's prospective robo-taxi revenues are projected to dwarf traditional car sales in profit margins, thanks to high software margins. This anticipated profitability from autonomous ride-hailing is a major part of Arc's optimistic outlook—and it's a scenario many industry watchers see as increasingly plausible, especially given Elon Musk's recent comments suggesting full autonomy could arrive as soon as 2024.