What Seeking Alpha analysts think about the Tesla robotaxi event
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Tesla (NASDAQ:TSLA) will host a high-profile robotaxi event with the title “We, Robot” at Warner Bros. Studios in Burbank, California in one week on October 10. The event was originally scheduled for August 8 before Elon Musk said the company needed more time to make an important design change and to prepare to show off a few other things. The highlight of the event is likely to be the reveal of a Cybercab prototype, which is anticipated to be a two-door sedan with a front that is relatively similar to the Model 3. Elon Musk and gang could also deliver estimates on the size of the robotaxi market, a timeline for achieving unsupervised FSD, the potential for incremental AI-driven revenue, and other applications of the company’s growing robotic technology.
Seeking Alpha analysts are weighing in on the implications.
“As I shared in my previous report, Tesla is a binary bet on autonomy (FSD and Optimus) with ~$600B of TSLA’s ~$800B market cap attributable to its autonomy prospects. With Alphabet’s (GOOG)(GOOGL) Waymo and Baidu’s (BIDU) Apollo Go expanding their robotaxi services, Tesla is under increasing pressure to deliver on its Tesla FSD robotaxi promises. As such, Tesla’s robotaxi event on 10th October is a huge deal, and I will be intrigued to discover vehicle specs and launch timelines. Based on our research, Tesla FSD has been improving rapidly with newer versions; however, getting Tesla FSD to L4/L5 autonomy could be a painstakingly long process. Ahead of the launch event, Tesla stock has been building momentum, and we’re now close to 52-week highs. Given Tesla’s lackluster financial performance, the stock is clearly reflecting investor optimism about robotaxis. The onus is on Musk & Co. to deliver!”
“Many investors are looking for a big robotaxi announcement, as the regular EV business is only showing disappointing growth. If Tesla can deliver something big, the bulls’ thesis around autonomous vehicles would be strengthened, but if Tesla does not deliver anything big and tangible, the stock price reaction could be quite negative, considering TSLA trades well above recent lows and at a 110x forward earnings multiple.”
“The robotaxi event could shift investor focus to Tesla’s autonomous vehicle potential, offering a new revenue stream and boosting the investment narrative… Specifically, I expect Tesla to showcase its fully autonomous robotaxi and submit a time-line for when the company expects its AV solution to be available in the market. The impact here could be a significant one, not only for Tesla’s share price, but also for the company itself.”
“Tesla’s optimism rests on a good ramp up in robotaxis. However, Google’s (GOOG) Waymo has set a very high bar in terms of safety and service… I am still optimistic about the rollout of the robotaxi service. However, Tesla will have to compete against the full might of Google. There is more downside potential for Tesla if the hype does not meet reality. The robotaxi service requires massive investment, and it requires rapid scaling up of commercial operation to distribute the cost.”
Shares of Tesla (TSLA) were down 1.6% in premarket trading on Thursday, after falling 3.5% on Wednesday. Options trading implies a swing in share price of 7% for TSLA shares over the next two weeks.