Tesla has been working on its own ride-hailing app, Tesla Network, and now analysts are starting to figure out how to factor it into the automaker’s valuation.

Ark Research has been by far the most bullish firm on Tesla.

Its investment arm is a Tesla shareholder and its research has an insanely ambitious $15,000 price target on Tesla’s stock.

In a new note, analyst Tasha Keeney is now looking at the impact of Tesla launching its own ride-hailing service:

“Based on our research, Tesla could launch its ride-hailing service at a premium price of $4 per mile, slightly more than Uber’s average price in New York City, and could lower prices over time to penetrate more price-sensitive markets. ARK estimates that Tesla’s ride-hailing service could deliver roughly 50% EBITDA margins, a premium to Uber’s in cities it dominates and, that at global scale and an average of $1 per mile, its addressable market would be roughly $50 billion.”

For years now, Tesla has taunted a ride-hailing app to be powered by its self-driving system.

At first, the automaker has been linking the launch of the app with its Autopilot system reaching full self-driving capability, but CEO Elon Musk recently said that he was open to releasing the app, which he has called the “Tesla Network,” ahead of achieving full autonomy.

It would first be used as a regular ride-hailing app with Tesla drivers behind the wheel, but Tesla’s hope is that it would eventually not require drivers and Tesla owners could “send” their cars autonomously into the ‘Tesla Network’ fleet to give rides and generate revenue for the owner.

Ark believes that launching the app before autonomous driving would lower risks.

Tesla also plans to offer special insurance for the owners who decide to participate in the Tesla Network using their growing insurance division.

Electrek’s Take

$1 per mile is actually on the high side.

Once autonomous, Elon said that its “robotaxis” on the Tesla network could cost only $0.18 per mile to run.

It means that the cost to the costumer could be just around $0.25 per mile and still be highly profitable.

But Tesla could increase the price significantly to increase profit margins will still beating driver-powered ride-hailing services.

Elon said that a Model 3 on the network could generate about $30,000 in gross profit per year.

That’s crazy if it turns out to be true.

Of course, that’s all dependent on Tesla delivering on its promise of a full self-driving system, which is easier said than done.

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