Two Main Reasons Tesla Motors Inc (TSLA)’s Stock is Up Year To Date and Will Grow Further

A big part of Uber’s moat is the tens of thousands of drivers on its platform that reduces the wait times for a ride. The shorter wait times make Uber superior to other ride sharing apps. Once autonomous vehicles hit the streets, however, human drivers are no longer needed and Uber’s advantage suddenly goes away. If Tesla chose to do Tesla Mobility, the waiting times could be as short as Uber’s and its prices could be cheaper than Uber’s because Tesla Mobility wouldn’t have to pay for vehicle markups.

Tesla could make Mobility work through a spun-off company, to which Tesla could sell vehicles, and which could issue shares to investors. Tesla Mobility would then use its autonomous vehicle fleet to generate a stable cash flow stream to pay its shareholders dividends, not unlike today’s MLP’s.

The thought of Tesla Motors Inc (NASDAQ:TSLA) launching a mobility app seems crazy now, but other vehicle and tech companies are considering launching similar products as well. According to Reuters, Mercedes-Benz is considering establishing a large fleet of autonomous cars to cater to people who don’t want to own cars, but still want to ride in premium vehicles. According to Business Insider, Google Inc (NASDAQ:GOOGL) is considering its own autonomous vehicle fleet one day too.

If Tesla gets a running head start in autonomous vehicles and home batteries, the two initiatives could generate significant value for its shareholders. Given Tesla’s stock price and recent price action, it seems that’s precisely what many investors are betting on.

Disclosure: None