A press conference that Tesla CEO Elon Musk called "going down in history" pushed the public's expectations to the extreme, but when the curtain opened, there was only a short 20 minute theme introduction, which seemed somewhat sloppy and many questions were not answered directly.
Since Tesla announced its "Robotaxi Day" event on April 5th this year, the market sentiment has been very high, and Tesla's stock price has also risen accordingly. As of the close of the stock market on October 11th, it has accumulated a 45% increase. Musk previously stated that the shift towards autonomous driving and AI could potentially value Tesla at $5 trillion, approximately seven times the company's current market value.
At around 11am Beijing time on Friday, October 11th, "Robotaxi Day" was finally held. Although the appearance of 20 Robotaxis (autonomous taxis) was eye-catching, analysts covering Tesla almost unanimously believed that there was a lack of details overall, and the market and investors did not hear what they hoped to hear from Musk. There are at least three questions that Musk has not answered: when will the Tesla Robotaxi land, whether there are any latest developments in Tesla's fully autonomous driving (FSD) technology, and when will the long-awaited low-cost model be released.
In the subsequent opening of US stock trading, Tesla fell 8.78%, with its market value evaporating nearly $70 billion in one trading day. Uber, a ride hailing company, surged 10.81%, hitting a historic high during trading, while Lyft also surged 9.59%, as analysts said Tesla's Robotaxi lacked details and eased competition.
After the press conference, even Tesla's long-term bull and Morgan Stanley analyst Adam Jonas couldn't stand it anymore. In his research report, he exclaimed, "That's it? It's disappointing and lacks details." But there were also those who were bullish. We strongly disagree with the disappointing statements made at this press conference, as we have seen significant improvements in Cybercab and the humanoid robot Optimus. We believe that the launch of Cybercab and Optimus in the coming years may become a major contributor to Tesla's financial performance, "said Daniel Ives, Managing Director and Senior Stock Analyst of Wedbush, in an email to the Daily Economic News
Question 1: What is the actual landing time of Cybercab?
The press conference was held at a film studio near Los Angeles, where Musk announced that Tesla plans to begin production of a Robotaxi called CyberCab in 2026 and launch the operation of an unsupervised fully autonomous driving feature called FSD in California and Texas, USA.
He further pointed out that CyberCab's production capacity will significantly increase in 2027 to form Tesla's RoboTaxi fleet. The cost of the car will be less than $30000.
However, Musk's demonstration not only lacked technical details, but also avoided discussing topics such as regulation or whether Tesla will own and operate its own Cybercab.
Tesla official website
That's all? Disappointing and lacking in details, "Adam Jonas, a well-known automotive analyst at Morgan Stanley and a long-term long bull of Tesla, wrote in a report to investors on Friday. Analysts from Wells Fargo also agree with this view, stating that Tesla's Robotaxi is "dazzling but lacks substance
Deepwater Asset Management analyst Gene Munster also stated at the first opportunity that the appearance of Cybercab cars is good, but the launch time is uncertain, and it may not be widely available until 2027. "For those who want to invest in Tesla but are skeptical, this time point is too far away
Munster also pointed out that although Tesla's self driving car Robovan is impressive, Musk has not told the public when it will be launched, and it may not be until at least 2028.
Da Mo analysts emphasized that Tesla faces challenges in expanding its self driving taxi business, including the required technology, regulations involved, and the complexity of route and fleet management.
Question 2: What are the latest developments in FSD?
Most analysts believe that considering regulatory barriers and doubts about the safety of its autonomous driving technology, Tesla will need several more years to launch Robotaxi.
Unlike other car companies that use LiDAR solutions, Tesla's FSD adopts an end-to-end pure visual solution, but Musk did not disclose any information about the latest progress of FSD at this press conference.
Analysts from US investment bank Jefferies have stated that Musk has not provided "verifiable evidence" of progress in Tesla's autonomous driving technology. They added that this "makes it difficult to assess the feasibility of the goals outlined by Musk at the press conference, as there is currently no precedent for using visual alone methods to achieve higher levels of autonomous driving.
Goldman Sachs analysts stated in a report, "We would not be surprised if Tesla stock experiences a sell-off in the coming weeks, as the momentum before the press conference will gradually dissipate
Meanwhile, Da Mo believes that Musk failed to prove at the press conference that Tesla is an AI company. Adam Jonas, an analyst at Daimyo, pointed out that Musk did not mention any details about the improvement of Tesla's FSD system, nor did he disclose any details about Tesla's collaboration plan with Musk's artificial intelligence company xAI.
Adam Jonas stated that he has been searching for quantitative data on Tesla's FSD improvements and is also looking forward to business strategies for regulated and unregulated carpooling services. In a report on Friday, he wrote that the press conference was "disappointing in many ways: lacking data on changes in FSD/technology, ride hailing economy, and Cybercab's listing strategy. Overall, we are disappointed with the content and details of Musk's speech. Therefore, we expect Tesla's stock price to face pressure in the later stages
Barclays analysts said that Thursday's press conference was more about showcasing Musk's vision for a fully autonomous driving future. The automotive team of the bank wrote in a report, "As expected, as with the previous Tesla product launch, this launch did not disclose details, but emphasized Tesla's vision of growth in the AI/autonomous vehicle field. We did not get any updates on the FSD development or data reflecting the improvement of the FSD system."
Question 3: When will low-priced car models come?
Analysts said before the Tesla launch event that they hope Musk can share information about the long rumored low-priced model Model 2 at the meeting.
Previously, Musk had been promising to launch a car with a starting price of around $25000, which investors believed was crucial for Tesla to win new customers. Meanwhile, cheaper electric vehicles are key for Tesla to increase delivery volume and consume excess capacity in existing factories.
The reporter from the Daily Economic News noticed that the market's expectations for the Model 2 are not inferior to Cybercab, as Tesla's outdated model has clearly affected its sales. According to Wards Automotive, a data provider in the automotive industry, as of August this year, Tesla's sales in the United States have decreased by nearly 10% year-on-year, compared to a 25% year-on-year growth rate in 2023.
Unfortunately, the Model 2 did not make its debut, which further raised doubts in the market about Tesla's car sales prospects. If Tesla does not want its annual delivery volume to decline for the first time, it needs to deliver a record number of electric vehicles in the coming months.
Wall Street expects Tesla to deliver approximately 1.8 million vehicles in 2024, which is only roughly the same as 2023 and far below analysts' forecast of 2.3 million vehicles a year ago. In this context, if Tesla can launch a Model 2 priced below $30000, it will help drive Tesla's sales again and expand the company's potential market.
CFRA Research analyst Garrett Nelson stated in a report, "We are disappointed with the lack of details in Tesla's recent product roadmap, and we believe that today's press conference will not help change Tesla's mid-term profit outlook
There are also institutions that are watching too much amidst doubts
Amidst a chorus of doubts, some institutions have also shown a keen interest in the content of Tesla's press conference.
Analysts from investment bank Piper Sandler believe that Tesla's "true believers" have "every reason to be excited" after this press conference. Bank of America analysts also stated in a report that the press conference "did not disappoint the hype," but the target of production starting in 2026 "may be too optimistic.
Bank of America analysts reiterated their "buy" rating on Tesla and added, "Interestingly, Musk stated that the basic AI technology of the humanoid robot Optimus is the same as the technology used in Tesla's electric vehicles, as the only difference between the two is the physical shape. We believe this indicates a fact that Tesla is no longer just a traditional car company. Although the financial impact of these potential new products is still unclear, AI and robotics technology may be Tesla's main development path in the next decade
Daniel Ives, Managing Director and Senior Stock Analyst of Wedbush Investment Bank, also stated in an email to Daily Economic News reporters, "Investors and bears are asking, where are the more details? Yes, we fully agree that ideally, Musk and Tesla should indeed spend more time on the details of their autonomous driving strategic vision. This will put pressure on Tesla's stock price on Friday. However, we strongly disagree with the disappointing statements made at this press conference, as we have seen significant improvements in Cybercab and the humanoid robot Optimus
We believe that this press conference is just a glimpse into the future of Tesla and the next generation of transportation from the outside world. From Cybercab to Optimus, to the route of unregulated fire departments in California and Texas by 2025... Musk has put forward a vision, and we have seen these cars up close, ultimately believing that this will mark Tesla's transformation from an electric car manufacturer to a broader AI/robotics/disruptive technology company. Although this will take time, we believe that the launch of Cybercab and Optimus in the coming years may become the main contributors to Tesla's financial performance, and may account for 20% of total profit/profit margin by 2030, "Ives added.
Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Based on this operation, the risk is borne by oneself.
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