Investor's Corner
Tesla to reopen Fremont factory for “limited operations” as CA lifts shutdown for lower risk industries
Tesla is expected to resume operations at its Fremont factory in Northern California as early as today, following an announcement by state Governor Gavin Newsom that “lower risk industries” will be able to resume work activities. Multiple emails sent by Tesla executives on Thursday evening, including CEO Elon Musk, outlined the company’s plans to reopen the production lines on Friday, May 8.
“In light of Governor Newsom’s statement earlier today approving manufacturing in California, we will aim to restart production in Fremont tomorrow afternoon. I will be on the line personally helping wherever I can,” Musk wrote in an email obtained by CNBC. “However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so. These are difficult times, so thanks very much for working hard to make Tesla successful!”
In another company email from Tesla’s Head of Human Resources, Valerie Capers Workman, it seems Tesla plans to resume “limited operations” by allowing 30% of the regular employees on a shift to come in for work, according to CNBC.
Elon Musk threatens to move Tesla away from California amid ongoing lockdown dispute
Governor Newsom announced the lift on Thursday evening, stating that clothing stores, bookstores, florists, sporting goods stores, as well as manufacturing and logistics operations, could resume their routine work.
The news came to the approval of Musk, who has been a vocal proponent of lifting Stay-at-Home bans. Musk called for the orders to be raised during Tesla’s Q1 2020 Earnings Call on April 29 and has pushed for leniency on the prohibitions.
Musk also opened up in broader detail about his discontent for the Stay-at-Home orders on a recent episode of the Joe Rogan Experience podcast. The Tesla CEO cited he was still skeptical about the severity of the illness, and believed there needed to be more accurate data concerning the number of people infected.
While Musk has been critical of the panic that the virus has incited, he has done his part to help by donating ventilators to over 50 hospitals that are located in Tesla’s delivery areas.
It appears that Tesla’s Fremont facility may receive the hypothetical “ok” to reopen. After the company seemed to have a preliminary timeline to open Fremont on May 4, the plans were derailed after Alameda County health officers had decided that Stay-at-Home needed revisions.
Many expected the restrictions on free travel to end in June. However, it seems that Newsome and other political members have decided that it is safe to begin reopening some portions of the California workforce. The facilities that the State of California is choosing to open seem to be low risk as there is little face-to-face interaction other than brief transaction periods that would take place at retail locations.
Still, retailers must “increase pick up and delivery and encourage physical distancing during pickup and install hands-free devices.” Manufacturers are to close breakrooms and create outdoor break areas with seating designed to promote social distancing measures. Warehouses are encouraged to carry sanitation materials during deliveries and use protective equipment during every stop.
Tesla employs roughly 20,000 people in Northern California’s Bay Area. Half of the 20,000 work at the Fremont facility, and Elon Musk seems to be eager to get them back to work. With the company halting production lines since Fremont’s closing on March 23, there is plenty of work to be done, including the ramping up of the Model Y, the company’s newest vehicle.
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 is not sparing any expense in ensuring the Cybercab is safe
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