TSLA Analysis: Tesla's $1.5 Trillion Bet on Robotaxis and Optimus Faces a Margin Squeeze and China's EV Onslaught
Tesla Inc. (NASDAQ: TSLA) trades at $402.51 per share as of February 28, 2026, commanding a $1.51 trillion market capitalization that prices the company not as an automaker but as a future robotaxi and AI platform. At 241x trailing earnings and nearly 58x sales, Tesla's valuation implies a transformation that has yet to materialize in the financial statements — Q4 2025 net income was just $840 million on $24.9 billion in revenue, with operating margins lingering below 6%. The bull case has rarely been more narrative-driven. Full Self-Driving approval is expected in the Netherlands as early as next month, marking Tesla's first European regulatory breakthrough. The Austin-based Cybercab dedicated robotaxi and the humanoid Optimus robot are both slated for production at the German Gigafactory. Yet the bear case is equally forceful: BYD, Li Auto, and NIO are steadily eroding Tesla's China market share, automotive gross margins have compressed from over 25% two years ago to roughly 20%, and Elon Musk's political entanglements continue to generate headline risk. For investors trying to separate the vision from the valuation, Tesla in early 2026 is one of the most consequential positions in any portfolio. The stock sits 19% below its 52-week high of $498.83 and has drifted 1.9% lower since its last earnings report. Whether this pullback is a buying opportunity or the beginning of a reality check depends entirely on which Tesla you believe you are buying — the car company or the AI company.