Investor's Corner
Tesla’s ‘big week’ set to get automaker back on track with big picture story: firm
Tesla’s “big week,” which includes a quarterly delivery report with major implications and a Robotaxi unveiling event that could truly set the tone for the company moving forward, is set to get the automaker back on track with its big picture story, Wedbush said in a new note.
That is, if Tesla can come through on both.
Wedbush put out its third note in the past two weeks on Tuesday morning, all trying to set a good narrative for what the Q3 delivery figures and Robotaxi event could mean for the stock.
It’s no secret Tesla has been relatively lackluster in terms of stock performance in 2024. It’s only up 2.36 percent for the year, but a delivery beat for Q3, which could set the tone for Q4, and a robust and informational Robotaxi unveiling event, could both help end the year with more growth.
Wedbush’s Dan Ives provided some color on the delivery picture in the note:
“After a bumpy 1H for Musk & Co. as the company saw softer EV demand along with the broader industry earlier in the year, we believe 3Q will provide a solid rebound looking to 2H for the company as China continues to heat up and price/demand stabilization has continuously been seen throughout the quarter.”
As for the Robotaxi unveiling event, Ives said:
“Next Thursday, October 10th, Tesla will be hosting its long-awaited “We, Robot” Robotaxi event after the market at the Warner Bros. movie studio in Los Angeles, which we will be attending live for this historic event. We believe Robotaxi Day will be a seminal and historical day for Musk and Tesla and marks a new chapter of growth around autonomous, FSD, and AI future at Tesla. We continue to believe Tesla is the most undervalued AI name in the market, and we expect Musk & Co. to unveil some “game-changing” autonomous technology at this event next week.”
Wedbush has high expectations for the Robotaxi unveiling event. Tesla has hyped it up plenty. Musk has agreed it could be the biggest event for Tesla since the Model 3 unveiling. While it could be groundbreaking, there is a lot to consider, especially the fact that a lackluster event could be more damaging than complimenting to the Tesla story.
The note pushes Tesla to update investors on Cybercab scaling, the overall cost per mile, a rideshare app, and a demonstration of the capabilities. These are nearly looked at as non-negotiables for the event, and if Tesla does not come up with a display of these things, shareholders could come away disappointed.
Tesla expected to unveil ‘game changing’ autonomous tech next week: Wedbush
That is not to say it will be a complete failure. Another note from Barclays on Monday noted that some Tesla shareholders will be “entrenched” in their outlook on the company, and even if the Robotaxi unveiling is flat and disappointing, it is unlikely to change much.
Still, Wedbush believes the Robotaxi event is the next step in Tesla’s robust story as a company:
“With very few industry events as widely anticipated as this, we believe Musk will address the near-term pain points seen by investors and the company’s long-term vision as Tesla goes through its second transformation not seen since the Model 3/Y production overhaul.”
Wedbush maintained its ‘Outperform’ rating and a $300 price target.
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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.
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