MW Tesla Robotaxi day is around the corner. Here's what to expect.
By Claudia Assis
Tesla's robotaxi event likely to be 'long on vision'
Tesla Inc. will shine the spotlight on its robotaxi technology and ideas on Thursday amid hopes that the event, scheduled to take place at a Hollywood movie studio, will boost the EV maker's beleaguered stock.
Robotaxi day, officially called "We, Robot," presumably after Isaac Asimov's "I, Robot" collection of science-fiction short stories, will attempt to answer the many questions around a potential ride-railing fleet of self-driving Teslas.
Expectations are that Tesla $(TSLA)$ will show at least a prototype of an autonomous vehicle, and perhaps a ride-hailing app as well; talk about its newer, cheaper EV in the works for next year; and maybe pull a "wait, there's more" moment showcasing other future EVs.
At its core, the event is a party, not an official investor day. Setting that tone, it's slated to take place at the Warner Bros. studio in Burbank, Calif., starting at 10 p.m. Eastern.
Tesla executives will need to "reinforce to consumers and investors that they continue to be innovators," Gene Munster with Deepwater Asset Management said in an interview.
Munster expects at least a robotaxi prototype, and talk of a "Model 2" cheaper EV. The wild card, he said, would be talk of a completely new EV, such as a commercial van.
"The bar on the robotaxi is is pretty high, but the rest of the stuff is pretty easy, they don't need to roll a vehicle out there. They can just talk about it," Munster said. The "real substance" would be a timeline for the vehicle, he said.
Part of the allure of the day will be filling the blanks on what a Tesla robotaxi would look like. In Munster's view, the demo vehicle likely won't have a traditional steering wheel, and will be able to hold about four people.
Chief Executive Elon Musk has talked about the concept of robotaxis for nearly a decade, and in 2019 said that a fleet of a million autonomous Teslas could be on the road as early 2020.
He has billed the robotaxis as a money-maker for Tesla owners, who would be able to rent out EVs that otherwise would sit idle, and a cash machine for the company in terms of data-mining, AV prowess and other possibilities.
Musk has owned up to overoptimism about autonomous vehicles, among other topics, most recently in a July call with investors after Tesla's second-quarter earnings.
"Tesla's history is overpromise and underdeliver, so whatever timing is put on this vehicle, it's going to be pushed back," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions LLC, in an interview.
"We are still considering what promises will make it to production and what won't," he said.
Besides potential production hiccups and a loose timeline, a fleet of Tesla robotaxis likely will face regulatory pushback, Fiorani said.
"The fear among the general public is that they are more harmful than helpful," at least for the moment, he said. "I can't imagine that the average American thinks that the idea of a robotaxi is a good one, even if [the vehicles] are likely to be safer and eventually cheaper."
In a note earlier this week, Bernstein analyst Toni Sacconaghi, a known Tesla bear, had a list of 10 questions for Tesla around the project, and at the top were questions around the pathway toward regulatory approval, as well as insurance and privacy concerns.
"Ultimately, we struggle to see Tesla winning in [Full Self-Drive and robotaxi] and capturing sustained, outsized profits," Sacconaghi wrote. Even if Tesla were to first to full autonomy, others would likely catch up, he said.
"In the meanwhile, we continue to worry that Tesla's core autos business will have limited growth and margin expansion until the lower-cost Model 2 is ramped, likely only in 2027," the analyst said. Tesla has promised to add lower-cost EVs to its lineup in the early half of next year.
The robotaxi event likely will be "long on vision, and short on immediate deliverables or incremental revenue drivers," with a "sell the news" reaction on the stock, he said.
Tesla shares are down around 1% this year, contrasting with gains of about 20% for the S&P 500 index SPX.
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-Claudia Assis
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October 09, 2024 06:00 ET (10:00 GMT)
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