Elon Musk has said Tesla’s valuation could go as high as $5tn as it pivots to autonomous driving and artificial intelligence — seven times its value today. The company’s shares are down more than 10 per cent in the past week after its robotaxi event disappointed investors. But even if Tesla had delivered on the hype, should robotaxis be that big a deal for investors today?

Despite recent declines, Tesla shares trade at 80 times forward earnings — a steep premium to global peers. That reflects hopes that its heavy AI spending will make it a key beneficiary of a shift to fully self-driving cars and that the transformation will arrive fairly quickly. But the pay-off is likely to take much longer than expected, with the beneficiaries spread out over a wide range of industries and companies.

Robotaxis have the potential to be transformative — should they become mainstream. For that to happen, mass production and commercialisation must come first, which will mean many more years of development and testing. It could also require a whole new approach to car manufacturing.