Investor's Corner
Tesla Earnings Call expectations from a bull: $25k, Robotaxi, Cybertruck, and Trump v. Harris
Tesla is set to report earnings for the third quarter this evening after market close, and one of its more bullish analysts, Gary Black, the managing partner of the Future Fund, has expectations of what could be discussed, along with his opinions on each.
Black gained attention just before the Robotaxi event that Tesla held earlier this month by stating that the $25,000 EV is more crucial in his eyes because it could drive the company to infiltrate a larger market share by taking buyers away from cars like the Toyota Corolla.
Here’s what he expects for the call:
Tesla’s $25,000 EV
Tesla enthusiasts disagreed with Black’s because of the massive implications of the Robotaxi, but in his own estimation, at least in the short-term, was more than credible. If Tesla could offer a $25,000 EV before incentives, it would come in at under $20,000, and it would eliminate nearly anyone from being out of the price range of a competitive EV.
However, Black does not see Tesla diving into any details on the potential for a $25,000 EV, and for good reason.
Tesla investors want Elon Musk to discuss these things at Q3 Earnings
If Tesla were to talk about a near-term release of the vehicle, it would cannibalize sales of the Model 3 and Model Y, two vehicles that the company is heavily incentivizing with attractive interest rates and other offers. Tesla is hoping for a strong fourth quarter so it can keep a delivery pace that is level with what the company achieved in 2023 with 1.8 million units.
Tesla Robotaxi Clarification
Black also said that the Robotaxi event, which the market did not see as a huge win according to how Tesla stock dropped after, needed more detail. This could be CEO Elon Musk’s opportunity to clarify the situation:
“There is likely to be at least one question on the detail missing from the robotaxi event: Specifically, how does TSLA go from 300 miles per disengagement today to the 17,000 miles per disengagement likely needed by regulators to approve a robotaxi deployment license? Mgmt can’t just assert that because of fleet size, data, and compute it will happen. There needs to be some support for the claim.”
Tesla Cybertruck Profitability
Tesla’s financials on the Cybertruck are also something that Black believes the company will be confronted about. The pickup is still in the early stages of production and it noted earlier this year that it should be at a breakeven by the end of the year.
It will be interesting to see if Tesla clarifies this.
Tesla’s EV Plans for Trump vs. Harris
Finally, Musk will likely be asked about Tesla and how it could perform under the specific EV policies of a Trump or Harris presidency. Both candidates have their own directions for the electric vehicle sector. While Musk has outspokenly supported Trump, he has not been the most supportive of EV mandates.
On the other hand, Harris was Vice President for Joe Biden, who rarely gave Tesla its flowers when it came to development and overall influence of the EV sector.
Tesla will report earnings at market close today, Wednesday, October 23.
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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 is not sparing any expense in ensuring the Cybercab is safe
Tesla’s Elon Musk gives timeframe for FSD’s release in UAE
