Investor's Corner
Ron Baron on Tesla $TSLA stock: ‘Now is the bottom’
Legendary investor and Tesla bull Ron Baron believes the electric automaker’s stock is set to see massive gains as the introduction of Robotaxi and a new vehicle lineup is imminent.
“Now is the bottom,” Baron said during an interview with Squawk Box on CNBC earlier today.
Baron has been one of the biggest winners in terms of Tesla stock ownership, seeing his portfolio increase by multitudes over the past several years and holding over $1.5 billion in shares at one point.
However, as the stock has felt some pressure over the past year and a half, being up only 1 percent compared to a year ago and down 32 percent since the beginning of 2024, Baron believes the only way to go now is up.
“It’s going to go up huge,” Baron said. When he was asked when this would happen, his answer was simple: “Now.”
As Tesla is trading at around $166 on Thursday morning during early trading hours, it has gone up the past two days, fending off bearish tones that mention slowing demand, increasing vehicle inventories, and a loss of market share in regions like China and Europe.
Tesla’s Q1 2024 Earnings Call seemed to put some rest to the questions that lie before it. When will a dedicated Robotaxi be released? How far is Tesla from solving Full Self-Driving? How will Tesla compete with automakers that have released affordable models that are comparable to their best-sellers that are not as competitively priced?
Robotaxi and Solving FSD
Tesla announced recently that it would unveil a dedicated Robotaxi vehicle on August 8. Based on an experience he recently had with the company in California, Baron believes the Robotaxi will be capable of driving people around without any human intervention.
He requested to see Steve Jobs’ house from Tesla’s Hawthorne Design Studio in Los Angeles. He claims that several others joined him in the car, and the vehicle drove him to Jobs’ former residence without any human intervention, handling things like a pedestrian waving the vehicle on and other challenging scenarios.
He believes Robotaxi will be coming soon.
Affordable Models
Tesla said in its Q1 2024 Shareholder Deck that it had ultimately decided to launch a new, updated vehicle lineup that will help accelerate the launch of new models ahead of previously planned timelines, which hinted toward a late 2025 production start.
Including a blend of both the existing and next-generation platforms, the new vehicle lineup will feature affordable models and will be able to be manufactured on existing production lines.
Tesla updates future vehicle lineup — and it will arrive sooner than expected
“This update may result in achieving less cost reduction than previously expected,” Tesla wrote, “but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times.”
Baron’s Other Thoughts
Baron kept the same tone regarding selling Tesla shares as he has for years: none are going anywhere.
He believes the stock will increase substantially, and the catalysts of Robotaxi and Full Self-Driving will be the main drivers of an increase in valuation for Tesla, aligning with the idea that the company is not an automaker and should be looked at in terms of software.
Today’s full video of Ron Baron talking $TSLA
“It’s gonna go up huge. Now is the bottom.” pic.twitter.com/FshULylNy6
— Christopher Dungeon (@ChrisDungeon) April 25, 2024
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Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla stock closes at all-time high on heels of Robotaxi progress
Tesla needs to come through on this one Robotaxi metric, analyst says
