Antoine Arnault

At Paris’ VivaTech innovation conference, Musk says Tesla’s market capitalization is directly tied to whether it can solve autonomous driving. French businessman Antoine Arnault ribs Musk about Tesla’s $827 billion market cap, noting it dwarfs LVMH’s valuation. Musk says he has little insight into stock price movements and suggests that Tesla’s market cap is tied to whether the company is able to perfect autonomous driving technology (he has been saying for several years that Tesla is close to solving autonomous driving, but the company’s cars still only provide advanced driver assistance features).

Valuations are a strange thing. Sometimes I’ve said, ‘Hey, I think the stock price is too high at Tesla,’ and then the stock price goes up. I’m like, ‘okay.’…Really the value of the company is primarily on the basis of autonomy. If you look at our total vehicle output, it’s almost two million vehicles this year or something like that. But that’s still only 2% of total vehicle production. The potential for autonomy is that the value of autonomy is so high, that even if you have a discount, a percentage probability of autonomy happening, that is so incredibly valuable.

He also repeats the idea of Tesla owners turning their vehicles into a fleet of self-driving robotaxis, which he once said would be implemented by 2020.