Elon Musk says Tesla’s market cap is directly tied to whether it solves autonomous driving

Tesla CEO Elon Musk thinks the automaker’s market capitalization is directly tied to whether the automaker is able to solve autonomous driving, the billionaire told LVMH scion Antoine Arnault on Friday.

Musk was speaking at Paris’ VivaTech innovation conference. The younger Arnault ribbed Musk about Tesla’s $827 billion market cap, noting it dwarfed the storied luxury conglomerate’s valuation.

The Tesla CEO responded and suggested he had little insight into stock price movements. “Valuations are a strange thing,” Musk said. “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.'”

But Musk also suggested Tesla’s market cap was tied to whether the company could perfect autonomous driving technology.

“Really the value of the company is primarily on the basis of autonomy,” Musk said. “If you look at our total vehicle output, it’s almost 2 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,” the CEO continued. He also reiterated the idea of Tesla owners turning their vehicles into a fleet of self-driving robotaxis, an idea that he once said would be implemented by 2020.

Musk has said for several years that Tesla is close to solving autonomous driving, but the company’s cars still only provide advanced driver assistance features.