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Tesla offers to make ventilators from its factory in response to coronavirus shortages (Update: NYC reaches out)
Tesla CEO Elon Musk has offered to make medical ventilators from its Fremont, California factory if a shortage should arise from the ongoing battle against the coronavirus.
The statement by Musk comes as a surprise to many, considering his recently publicized belief that the global anxiety around the COVID-19 virus has been blown out of proportion and that the danger of panic far exceeds the danger of the virus itself. Musk’s controversial statements have provoked a large response within the Twitter community, including that of Raja Abbas: a Tesla owner within the medical field.
Update: NYC Mayor Bill de Blasio reached out to Elon Musk in a cry for help after seeing his offer to make ventilators. “Our country is facing a drastic shortage and we need ventilators ASAP — we will need thousands in this city over the next few weeks. We’re getting them as fast as we can but we could use your help! We’re reaching out to you directly,” said the Mayor. Elon Musk responded.
“Please repurpose your factory to make ventilators which are needed ASAP. I am a Tesla owner and love the company. You have to stop being an idiot about this. This is a massive disaster. Ask the doctors in the field,” read a tweet by Abbas that was aimed at Musk.
Musk agreed to the request, noting that Tesla and SpaceX already have experience with manufacturing devices that support human respiration.
We will make ventilators if there is a shortage
— Elon Musk (@elonmusk) March 19, 2020
“Tesla makes cars with sophisticated hvac systems. SpaceX makes spacecraft with life support systems. Ventilators are not difficult, but cannot be produced instantly,” said Musk over Twitter, and further adding, “Which hospitals have these shortages you speak of right now?”
The need for additional ventilators has taken center stage in the ongoing fight against the spread of the contagious COVID-19 coronavirus that has strained hospitals and medical facilities with patients outnumbering available machines. The ventilator has become a critical first line of defense for patients infected by the virus, which attacks the lungs and prevents it from providing vital oxygen to organs within the body.
With more than two-thirds of coronavirus patients in critical condition needing respiratory support, hospitals and intensive care units in areas with a high concentration of infected patients have seen their limited supply of ventilators become fully exhausted. In attempts to prevent the spread of the novel coronavirus and reduce strain on intensive care units, governments from around the world have implemented social distancing measures by way of school closures, work from home policies, and complete lockdowns.
Exactly. My guess is that the panic will cause more harm than the virus, if that hasn’t happened already.
— Elon Musk (@elonmusk) March 19, 2020
The San Francisco Bay Area was the first in the nation to implement a strict “shelter in place” order that required people to stay home and non-essential businesses to shutdown. Tesla’s factory in Alameda County is among the businesses impacted by the policy that took effect on Tuesday, although it managed to remain in partial operation following a high-profile exchange with the County Sheriff’s Department.
The company cut its workforce by 75%, from 10,000 employees to 2,500 employees, as it remained partially open for essential business, excluding vehicle production. Musk’s offer to manufacture ventilators from the factory can be seen as a welcome invitation for medical facilities that continue to support the ongoing battle against the spread of the coronavirus.
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
