It's been a tough year for Tesla (TSLA 9.74%), with shares falling by 25% over the first four months of 2025. But long term, shares have the potential to go from $300 per share to more than $2,600. That's according to Cathie Wood, who manages the ARK Innovation ETF (NYSEMKT: ARKK).

According to a recent interview, Wood believes Tesla's stock price will rise by more than 1,000% over the next five years. And she credits one exciting catalyst for nearly all of this growth potential.

Cathie Wood loves this one catalyst for Tesla's stock price

Historically, the biggest catalysts for Tesla's sales growth has been new product introductions. Sales picked up tremendously when the company began shipping luxury models like the Model S and Model X, but it was really mass market vehicles like the Model Y and Model 3 that made Tesla what it is today. Last year, the company delivered around 1.8 million vehicles to customers. More than 1.7 million of those vehicles were either a Model 3 or Model Y.

This year, however, analysts are predicting negative sales growth for the company. A lot of that has to do with a lack of recent product introductions. The Model 3 began deliveries in 2017, with the Model Y starting deliveries back in 2020. That makes these vehicles eight and five years old, respectively. There have been updates along the way, but there's no doubt that Tesla's lineup has become stale and limited compared to other automakers, especially with competitors like Lucid Group and Rivian preparing several new mass market models that should hit the streets in 2026 and 2027.

Despite meager growth expectations, Wood believes a major new product in 2026 will absolutely change the game for Tesla forever. A new vehicle will be involved, but it's not vehicle sales that will drive Tesla's share price moving forward; it's a new service -- Tesla's long awaited robotaxi network.

TSLA PS Ratio data by YCharts

Can a robotaxi service add trillions to Tesla's market cap?

For years, analysts expected Tesla to unveil a $25,000 vehicle -- an even more affordable option than the Model 3 and Model Y. Elon Musk encouraged these expectations for years. But last November, Musk revealed that Tesla's $25,000 model wouldn't have a human driver. Instead, it would be driven completely autonomously. He dubbed the model Tesla's Cybertaxi. According to Reuters, "Musk says Tesla will start production of the Cybercab in 2026, after it deploys fully autonomous versions of its current Model 3 and Model Y vehicles in Texas and California next year."

Musk is infamous for his overly optimistic predictions. But if the company is able to begin production of the Cybercab next year, and is also able to turn on fully autonomous driving for its Model 3 and Model Y vehicles, Tesla will suddenly be at the center of an autonomous car-sharing revolution.

Since inception, Tesla has shipped more than 7 million vehicles. An estimated 5 million Teslas remain on the road today. Ride-sharing company Uber Technologies, for comparison, which has a $160 billion market cap, has around 8 million monthly active drivers.

Tesla should be able to drive higher margins than Uber given it won't have to share revenues with drivers, but it will still have to share revenues with car owners. So right away we see a big gap in Wood's predictions and Uber's actual valuation. Uber has millions of more drivers than Tesla has cars on the road today, and yet its total valuation as a ride-sharing service is just $160 billion -- not the trillions Wood believes would be added to Tesla's market cap.

Of course, autonomous driving could make ride-sharing a significantly larger market over time. But the numbers just don't add up for me right now. Wood has been known for her overly optimistic predictions in the past. And while Tesla is still an intriguing long-term investment, a $2,600 per-share price prediction in five years just doesn't make much sense looking at the numbers.