Al Root
Tesla stock fell early Tuesday. Kim Kardashian buying a Tesla robot wasn't helping -- yet.
Shares of the electric-vehicle maker were down 1.3% in premarket trading at $334.34 while S&P 500 and Dow Jones Industrial Average futures were down 0.4% and 0.6%, respectively.
The drop comes despite Kardashian, apparently, buying a Tesla humanoid robot the company calls Optimus. "Meet my new friend," she posted on X.
Tesla didn't respond to a request for comment about whether the robot was bought or on loan.
Tesla hopes to be selling artificial-intelligence-trained, labor-saving robots one day. CEO Elon Musk believes the robot business could be bigger than the car business one day.
"I feel confident in saying that we have the most advanced humanoid robot by a long shot," said Musk on his company's third-quarter earnings conference call in October. Tesla is "the only company that really has all of the ingredients necessary to scale humanoid robots...what other companies are missing is AI brain, or they're missing the ability to really scale to very high-volume production."
Optimus is still in development, though. Wall Street doesn't expect significant sales for years.
"The market size of humanoid robots can achieve 250,000 units [worth] $6.25 billion in 2030 globally and increase to 1.5 million [worth] $30 billion by 2035," wrote Deutsche Bank analyst Edison Yu in a recent report. "While Elon Musk commented that the cost can be brought down to less than $10,00 ultimately, current [robot cost] is estimated to be $27,000 to $76,000, largely depending on hardware design."
Yu projects 2035 robot sales of $10 billion based on 200,000 units selling for $50,000 each, and values Tesla's robot business at $22 a share, or about $70 billion. He rates Tesla stock at Buy with a $295 price target.
Robots and one robot purchase probably aren't what's moving the stock. Stock futures are weak as investors worry about what an escalating war between Russia and Ukraine means for global stability.
Tesla stock has also been exceptionally strong since the Nov. 5 presidential election, gaining 35% through Monday trading. Shares added 5.6% on Monday after Bloomberg reported President-elect Trump would seek to set a Federal standard to help regulate self-driving cars.
Tesla also uses AI to train its self-driving technology. Self-driving cars should arrive before robots. Tesla plans to launch an autonomous taxi service in late 2025.
Write to Al Root at allen.root@dowjones.com
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November 19, 2024 07:13 ET (12:13 GMT)
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