Investor's Corner
Tesla (TSLA) bull and ARK founder shows where Wall St goes wrong
Tesla (NASDAQ: TSLA) stock fell last week unexpectedly after the company’s Battery Day event. But Cathie Wood, a TSLA bull and the founder of ARK Invest, broke down Wall Street’s response and showed why analysts misunderstood some of the electric automaker’s revealings at the event.
Wood, who currently holds the CEO and CIO positions at ARK, broke down several mishaps that Wall Street analysts made during their post-Battery Day evaluations. ARK is one of the biggest bulls of TSLA globally, and the firm loaded up on stock following the event.
New Vehicle with a Lower Price
Wood indicated that when traditional automakers announce price cuts to current vehicles, it usually means that there is trouble. “Higher inventories and lower sales,” Wood wrote in a Tweet. However, Musk and Tesla did not unveil a lower price or discount on a current model. The company announced that within a few years, it would have another vehicle available for purchase, which would be sold for $25,000. This development leads to the indication that Tesla is beginning to reach price parity with gas cars.
Tesla’s broad range of expertise
Tesla is not just a car company, and many analysts forget to factor in its energy business and its software expertise in its valuation. While Battery Day was obviously about the company’s cells, it is not the only thing going on in Tesla’s world. Analysts who are following TSLA must be aware that EVs and ICEs are two different worlds, and they should be experts in more than just gas-powered cars as the market changes.
Wood notes that “Analysts following $TSLA should be expert in energy storage, robotics, artificial intelligence, and software-as-service. While they are expert at the internal combustion engine, traditional auto analysts are not equipped to analyze EVs, particularly $TSLA.”
The fact is, the EV market is substantially different from the ICE market, and trends are significantly different. Tesla also sells its vehicles in a completely different manner than the traditional automakers do. Tesla does not do sales, promotions, or even use dealerships to sell cars. All vehicles are sold for the same price, eliminating the stress of the car-buying experience.
A skyrocketing EV industry, which Tesla leads
Tesla is leading the charge in the accelerating expansion of the EV market, and the next several years will show that the world’s drivers are leaning toward electric transportation. “According to @skorusARK‘s battery research, #EV sales will scale nearly 20-fold from roughly 1.8 million last year to 35 million, 40% of total global auto sales, during the next five to six years.”
Tesla also expects to grow exponentially over the next few years thanks to more production facilities, more efficient manufacturing, and more affordable models. The company plans to deliver 500,000 cars this year but has its sights set on 20 million vehicles worldwide by 2030.
The declining automotive industry has not seen exponential growth in around 100 years, Wood writes. Since the EV market has expanded, ARK expects an exponential growth territory for the sector for at least five to ten years.
Despite Wall Street’s unexpected decline of TSLA shares last week following Battery Day, the company is beginning to regain some of the momentum it felt during mid-September. As of now, TSLA stock has recovered from the post-Battery Day dip, which saw shares fall to around $380 apiece. At the time of writing, TSLA was trading at $420.10, up $12.76 during the Monday session.
Disclaimer: Joey Klender is a TSLA Shareholder.
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 aims to combat common Full Self-Driving problem with new patent
Delaware Supreme Court reinstates Elon Musk’s 2018 Tesla CEO pay package
