To The Moon

The much-anticipated event of the week finally happened on Thu, 10 Oct 2024 evening at Warner Bros. Discovery film studio.

In a poor attempt to evoke Hollywood glitz & glam setting, $Tesla Motors(TSLA)$’s CEO rode a 2-seater robotaxi (called Cybercab), with butterfly doors to the stage. (see above)

True to his beliefs of how an autonomous EV “should” look like, the Cybercab is without steering wheel and pedals.

Enthusiastically Mr CEO shared:

• Cybercab can be had for below $30,000.

• Tesla hopes to produce Cybercab before 2027.

• Expects (not 100% confirmed) Tesla to have “unsupervised FSD” up & running in Texas and California in 2025 (no specifics) in its fleet of Model 3 & Y EVs.

• Cybercab would adopt “Inductive charging” where an EV rolls up to a station to recharge, without plugging in required.

Unfortunately, that was when the hype evaporated and reality set in.

Based on his tales spinning track record on autonomous driving (see below), the market did not bite this time.

• 2015. Mr CEO told shareholders that Tesla cars would achieve “full autonomy” within 3 years. It did not happen.

• 2016. Mr CEO said a Tesla EV would be able to make a cross-country drive without requiring any human intervention before the end of 2017. It did not happen.

• 2019. On a call with institutional investors that helped raise > $2 billion, Mr CEO said Tesla would have 1 million robotaxi-ready vehicles on the road in 2020, and will be able to complete 100 hours of driving work per week each, making money for their owners. It did not happen.

• 2024. This April, he resorted to reverse psychology when he declared that autonomy is the company’s future. If someone does not believe that Tesla is going to solve autonomy, he should not invest in the company.

Market’s Reaction.

As the robotaxi reveal happened on a Thursday evening, Wall Street let known their reactions with a post-closing dip in Tesla’s share price.

On Fri, 11 Oct 2024, they let ripped, when trading resumed, Tesla just kept falling. (see above)

At one point, it fell more than 9.0% intraday.

By 4pm, Tesla lost -8.78% to end the week at $217.80, wiping out 4 weeks of gains gathered since 10 Sep 2024.

This is not the worst.

Wall Street’s Analysis.

Wall Street veterans gave their frank opinions, the following day after the event unfolded.

(1) Automotive website Edmunds.com, Vehicle testing director, Jonathan Elfalan said:

• When you think of a cab, you think of something that is going to carry more than 2 people.

• A 2-seat-only Cybercab is very perplexing.

• Has Mr CEO “missed the point” on how a two-seater Cybercab would meet the needs of families headed to a restaurant or airport?

• Either that or he expected these to appeal only to a niche clientele.

(2) Leverage Shares, Senior researcher, Sandeep Rao:

• The investment management firm, a Tesla investor — confirmed that market for 2-door robotaxis would be extremely limited.

• Implying foreseeable limited sales volume.

(3) J.D. Power, Analytics firm.

• According to its database, 2-door vehicles account for just 2% of car sales in the US, excluding SUVs and pickups.

• This is clearly a swipe at Cybercab’s potential sales.

(4) Waymo, ex-CEO, John Krafcik commented:

• Cybercab’s design looked "more playful than serious".

• The low-slung, sporty coupe design Cybercab, posed challenges for (i) older passengers and (ii) those with disabilities.

• This implies limited upside to Cybercab sales.

(5) AutoForecast Solutions, VP, Sam Fiorani:

• Two-seaters have been proposed as commuter vehicles, for decades.

• They have not taken off.

• Tesla will eventually need to build larger, practical robotaxi.

(6) Carson Group, Senior investment analyst, Blake Anderson:

• A Tesla investor exclaimed, if the Cybercab is supposed to be a lower-cost, mass-market model to widen Tesla's appeal, the 2-seat design does not make sense.

• This is probably a way that Tesla can introduce something quick to market, missing the goal in the process.

JP Morgan’s Prediction.

Actually, before the Cybercab reveal, $JPMorgan Chase(JPM)$ had already forecasted on Tesla’s impending fall from grace. (see above)

Its high price might be too good to be true.

Many analysts think that Tesla's stock price could drop by a massive -48% soon.

This could be bad news for US stock market overall.

JP Morgan, Analyst, Ryan Brinkman worries that:

• Tesla's stock price crash could hurt the stock market in the remaining months of 2024.

• People might start to think that Tesla's price is too high and stop buying more shares.

Statistically, Tesla's sales have been slower for the first three quarters of 2024.

Is this a sign that people are be losing interest in its aged line of EVs ? Is Tesla losing its appeal?

Tesla's stock price is already going down, even though the price is still very high, it has started to fall. It might get even lower by the end of 2024.

Technical Analysis.

Looking at Tesla’s past month stock performance,

• It is still trending above its 200-day moving average (ma).

• However, it has undercut its 10-day ma, 20-day ma, 50-day ma respectively. (see above)

Resistance and Support levels.

Based on Fri, 11 Oct 2024’s closing price of $217.80, below are its resistance and support level.

• Pivot point 1st Resistance level (high) - $222.63.

• Pivot point 2nd Resistance level (high) - $227.47.

• Pivot point 1st Support Point (Low) - $213.67.

• Pivot point 2nd Support Point (Low) - $209.55.

My viewpoints: (mine only)

Mr CEO’s years of “cry wolf”, have finally caught up with him.

Without facts and specifics, he still thinks he could get away with Cybercab, this time as well?

Phil Koopman, a car safety expert said that Tesla does not need to talk about Cybercab production because it has not even secure regulatory approvals to make & sell EVs without a steering wheel or pedals.

Mr CEO also did not share how quickly Tesla could mass-produce Cybercabs ?

Maybe that was why his utterance of Cybercab’s availability as “before 2027”.

Looks like, Mr CEO does not understand that 2 years is a very long wait time, too long.

By the time Cybercab rolls out of the production line, existing robotaxi providers (see below) might already have become profitable.

• $Alphabet(GOOG)$’s Waymo.

• $General Motors(GM)$’s Cruise.

• $Amazon.com(AMZN)$’s Zoox.

Leaving Tesla way back at the starting point by itself - Oops!

As for Mr CEO’s claim that the Cybercab will cost less than $30,000, do not believe it.

One only need to look to Tesla’s Cybertruck pricing, to know what will be in store for Cybercab.

(1) Cybertruck’s initial price (2019) :

• Base model: $39,900.

• Dual motor AWD: $49,900.

• Tri motor AWD: $69,900.

(2) Cybertruck’s before rollout (2023):

• Rear-wheel drive: $60,990.

• All-wheel drive: $79,990.

• Cyberbeast (tri-motor): $99,990.

Additionally, some of Cybertruck’s specifications & features (announced originally in 2019) were altered or removed.

Again, maybe that explains why Mr CEO was short on Cybercab’s details during the unveil.

Musk also did not offer details about robotaxi’s business models, such as a ride-hailing service.

Perhaps, the biggest disappointment in the We, Robot event was Mr CEO’s failure to provide updates on the "affordable" EV, that is supposed to enter production by late 2024 or mid-2025.

An affordable EV that many believe to be the key lifeline to Tesla's near-term effort to boost deliveries and use up excess capacity at its existing plants.

With a (a) missed Q3 delivery target, (b) a missed affordable EV and (c) probable “dismal” Q3 2024 earnings report on 23 Oct 2024, will October turn out to be the “double dip” that I highlighted in my 24 Jul 2024 post (click here ! to read post again !)

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• Do you think October will be the “double dip” month for Tesla, after July?

• Do you think Cybercab will be Tesla’s ticket out of its current doldrum?

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