Tesla (TSLA) shares closed up nearly 5% on Monday as investors bought into the CEO Elon MuskTesla’s latest statement is that Tesla will launch its long-awaited robotaxi on August 8.
Musk’s announcement about Tesla’s Robotaxi after the bell on Friday followed a Reuters report that Tesla canceled the plan to build a long-awaited sub-$30,000 electric vehicle, which some are calling the Model 2. Reuters says Tesla will instead focus on a self-driving robot taxi, and Musk responded on X that Reuters was “lying (again)”, before returning to the platform to announce the launch of a robotaxi, commonly understood to have no steering wheel or pedals. It’s still an open question whether Tesla will eventually reveal a low-cost electric car.
Despite the stock’s jump Monday, Wall Street analysts were divided on the announcement.
Deutsche Bank’s Emmanuel Rosner said the robotaxi news has “changed the argument” about Tesla.
“If the departure from the Model 2 is confirmed again, Tesla’s bullish case is probably that given the steady improvement in its autonomous technology, Tesla has decided to emphasize its software and AI advantages its uniqueness through its focus on robotaxi, technology that few OEMs [original equipment makers] can be imitated and that will bring more favorable economic benefits,” Rosner said on the optimistic side of the thesis.
However, the flip side is that Tesla has abandoned a “key reason” many people own the stock: the Model 2 as a volume play that will “re-accelerate volumes, margins and FCF [free cash flow],” Rosner said. That also means the bullish thesis hinges on Tesla cracking the code on self-driving cars, which would require overcoming a number of regulatory hurdles and gathering enough data to train the software.
Rosner has a Buy rating on the stock and a price target of $189.
On the other hand, Tesla investment expert Tasha Keeney noted at ARK Invest believes that Tesla’s long-term potential is largely tied to self-driving and autonomy capabilities.
“They have an unparalleled data advantage over every other company that is addressing full autonomy,” Keeney said in an interview with Yahoo Finance Live. As with AI, Keeney said data is key to training models and achieving their own performance patterns. -drive.She said Tesla’s fully self-driving (FSD) beta is near, noting that Tesla is accumulating 2.5 million miles of self-driving data from customers every day. Waymo Keeney says it has logged just over 10 million miles since the project began.
“We think this will boost Tesla’s future value. When we look at five years, we think it will be two-thirds of the enterprise value in five years. So we’re super excited about that,” Keeney said.
ARK Invest founder Cathie Wood recently reiterated the company’s $2,000 price target for Tesla, forecasts $10 trillion in revenue from the robotaxi effort.
On the other end of the spectrum is Craig Irwin at Roth Capital, who is much more skeptical about robotaxi. He believes that today’s stock price movements are technical in nature and not rooted in fundamentals. Irwin has a Neutral rating on the stock and an $85 price target.
“Professional investors follow momentum. They measure retail dynamics very carefully and the bullish scale of this announcement will be measured by all of my clients across Wall Street,” said Irwin. After reviewing the initial news, Irwin believes Tesla’s self-driving game is still very far away.
“[Autonomous driving] will consume as much electricity as the drive system [in current EVs]. Technically, that is conceivable, possible, but not realistic. [Tesla] the cars were sold, not in the form that anyone has them in today,” said Irwin.
Irwin suspects Tesla’s vehicles will need more advanced sensors, cameras and other equipment to truly achieve full autonomy, and that the craze for “Cyber Taxi,” as Irwin calls it, is taking over. hides the company’s larger underlying problems, such as lack of demand and strong competition.
“I think the stock could be halved; I think there will be more discounts. I think margins are more compressed and this is a departure from the fact that the company is currently shrinking,” Irwin concluded.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and more Instagram.
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