{"id":59513,"date":"2024-07-02T06:00:05","date_gmt":"2024-07-02T10:00:05","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=59513"},"modified":"2024-08-19T09:03:36","modified_gmt":"2024-08-19T13:03:36","slug":"why-long-term-investors-should-eye-tslas-robotaxi-potential","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2024\/07\/why-long-term-investors-should-eye-tslas-robotaxi-potential\/","title":{"rendered":"Why Long-Term Investors Should Eye TSLA's Robotaxi Potential"},"content":{"rendered":"<p><a href=\"https:\/\/quotes.ino.com\/search\/?s=NASDAQ_TSLA\"><span style=\"font-weight: 400;\">Tesla, Inc. (TSLA)<\/span><\/a><span style=\"font-weight: 400;\"> is set to release its second-quarter delivery update in early July, which is expected to show a decline for the second straight quarter. Analysts have adjusted their estimates for TSLA deliveries downward due to concerns over consumer demand and intense competition in China. In January, the company cautioned that delivery growth in 2024 would be \u201c<\/span><a href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/tesla-expected-post-lower-profit-margin-amid-doubts-growth-product-strategy-2024-04-22\/\"><span style=\"font-weight: 400;\">notably lower<\/span><\/a><span style=\"font-weight: 400;\">\u201d as the impact of months-long price cuts diminishes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to an average estimate derived from forecasts by 12 analysts polled by LSEG, the EV maker is expected to deliver 438,019 vehicles for the April-June period. Seven of these analysts have slashed their expectations in the past three months.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Further, Barclays analyst Dan Levy<\/span><a href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/tesla-deliveries-set-fall-second-straight-quarter-2024-07-01\/#a__text_July_201_20_Reuters__20_2D_20Tesla_s_lack_20of_20affordable_20new_20models_\"> <span style=\"font-weight: 400;\">revised his deliveries forecast to 415,000 vehicles<\/span><\/a><span style=\"font-weight: 400;\">, marking an 11% year-over-year drop. He stated that \u201ca soft delivery result could turn attention back to the currently challenging fundamental environment for Tesla.\u201d Meanwhile, RBC Capital Markets and UBS have set their delivery estimates at 410,000 and 420,000 vehicles, respectively.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For comparison, Tesla<\/span><a href=\"https:\/\/ir.tesla.com\/press-release\/tesla-vehicle-production-deliveries-and-date-financial-results-webcast-first-quarter-2024#a__text_Menu__Tesla_20Vehicle_20Production_20_26_20Deliveries_20and_20Date_20for_20Financial_20Results_Webcast_20for_20First_20Quarter_202024_text_AUSTIN_2C_20Texas_2C_20April_202_2C_and_20delivered_20approximately_20387_2C000_20vehicles_\"> <span style=\"font-weight: 400;\">delivered 386,810 vehicles in the first quarter<\/span><\/a><span style=\"font-weight: 400;\"> of 2024 and 466,140 vehicles in the second quarter of 2023, with its highest deliveries tally in the fourth quarter of the previous year at 484,507 units.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the anticipated dip in quarterly deliveries, many analysts suggest that investor focus is shifting from quarterly deliveries to TSLA\u2019s long-term projects, particularly the highly anticipated Robotaxi event scheduled later this summer.<\/span><\/p>\n<p><b>High-Profile Robotaxi Event<\/b><\/p>\n<p><span style=\"font-weight: 400;\">CEO Elon Musk officially announced on X that the company will<\/span><a href=\"https:\/\/www.theverge.com\/2024\/4\/5\/24122384\/tesla-robotaxi-reveal-date-elon-musk-august-8\"> <span style=\"font-weight: 400;\">unveil its long-promised Robotaxi on August 8, 2024<\/span><\/a><span style=\"font-weight: 400;\">. The upcoming autonomous vehicle will be built on Tesla\u2019s next-generation vehicle platform. Musk has long hinted at the possibility of a Tesla Robotaxi, even showcasing a fully covered vehicle during a 2023 event unveiling the company's third Master Plan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Musk previously stated that Tesla will eventually produce a car without human control. He further mentioned that Tesla vehicles equipped with Full Self-Driving Capability will, through software updates, continuously improve their driving skills. He also emphasized that Tesla owners could generate income from their autonomous cars by sending them to pick up and drop off passengers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That would be a part of the \u201cTesla Network,\u201d as described in Musk\u2019s Master Plan Part Deux. \u201cYou will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app,\" he added, \u201cand have it generate income for you while you\u2019re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Several years later, Musk\u2019s vision expanded even further. In 2019, he declared, \"By the middle of next year, we'll have over a million Tesla cars on the road with Full Self-Driving hardware.\" He also claimed that Tesla\u2019s Full Self-Driving (FSD) feature would be so dependable that drivers could \u201cgo to sleep.\u201d However, it should be noted that Teslas equipped with FSD software are not fully autonomous, and drivers should not sleep while using them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While Musk\u2019s promises may not always align perfectly with reality, the success of Autopilot and FSD proves that he remains at the forefront of a societal shift from human-powered vehicles to those piloted by AI.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">TSLA\u2019s stock has witnessed a continuous downturn, with a decline of nearly 15% year-to-date and more than 25% over the past year. However, the stock has surged around 16% over the past month as investors increasingly focus on the upcoming Robotaxi event.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While delivery data is crucial for an EV company, investors are looking beyond that. Ben Kallo, an analyst at Robert W. Baird,<\/span><a href=\"https:\/\/www.msn.com\/en-us\/money\/companies\/tesla-has-a-few-major-tests-on-the-calendar-before-the-robotaxi-unveiling\/ar-BB1p6ZIS?ocid=msedgntphdr&amp;cvid=0c9fe387020a4e9f9141d9ca6463c160&amp;ei=53\"> <span style=\"font-weight: 400;\">noted<\/span><\/a><span style=\"font-weight: 400;\">, \u201cCompared to Q124 when investor attention was intensely focused on near-term delivery estimates being too high, we see a growing number of investors shifting their outlook to the Robotaxi event on August 8 and the opportunity related to FSD.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ben Kallo anticipates that investor attention will remain toward the long term until the Robotaxi launch, which could include details on low-cost, next-gen vehicles. Meanwhile, Wedbush Securities analyst Dan Ives doesn\u2019t anticipate significant fireworks for the June quarter but believes the 8\/8 Robotaxi debut will be a substantial catalyst for TSLA.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">UBS, however, is more skeptical about the Robotaxi event being an immediate catalyst for TSLA\u2019s stock price. Nonetheless, the firm acknowledges that the EV maker has made significant technical progress in its Robotaxi and Optimus plans. And it is more likely than most companies to capitalize on AI in the physical world, with long-term benefits for its financial model.<\/span><\/p>\n<p><b>Potential Risks and Challenges<\/b><\/p>\n<p><span style=\"font-weight: 400;\">While the upcoming Robotaxi event holds promise, it also has inherent risks and challenges. Autonomous driving technology faces stringent regulatory scrutiny. Tesla must navigate complex legal landscapes to deploy its Robotaxi fleet, which could delay implementation and affect timelines.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">TSLA must continue to invest heavily in research and development (R&amp;D) to ensure the reliability and safety of its autonomous vehicles. Critics argue that Musk exaggerates the capabilities of the technology, often with fatal consequences. There have been hundreds of crashes involving Tesla vehicles using FSD and Autopilot, resulting in dozens of deaths. The EV giant currently faces several<\/span><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-06-07\/elon-musk-s-pile-of-lawsuits-span-autopilot-toxic-speech-ai\"> <span style=\"font-weight: 400;\">wrongful death lawsuits<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While the Robotaxi initiative has long-term potential, it requires substantial upfront investment. The financial burden of developing and deploying autonomous vehicles could impact Tesla\u2019s short-term profitability.<\/span><\/p>\n<p><b>Bottom Line<\/b><\/p>\n<p><span style=\"font-weight: 400;\">TSLA is scheduled to release its second-quarter deliveries report this week, with analysts expecting to show a decline for the second consecutive quarter amid weak demand due to a lack of affordable new models and stiff competition in China. The deliveries report will be released just a few weeks before the company\u2019s second-quarter earnings release.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Street expects Tesla\u2019s revenue for the second quarter (ended June 2024) to decrease 4.2% year-over-year to $23.88 billion. The consensus EPS estimate of $0.58 for the same period indicates a decline of 35.9% year-over-year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the expected drop in deliveries and weak quarterly earnings, several market experts suggest that investor focus is shifting to Tesla\u2019s long-term projects, particularly the high-profile Robotaxi event set for August this year. As the EV maker navigates the challenges and opportunities ahead, the Robotaxi initiative is a pivotal development that could redefine its future trajectory.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While short-term concerns persist, including weak consumer demand, regulatory hurdles, and ongoing legal challenges, long-term investors increasingly focus on Tesla\u2019s ambitious autonomous driving vision. The event is poised to showcase the company\u2019s technological advancements and could serve as a catalyst for renewed investor confidence.<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Tesla, Inc. (TSLA) is set to release its second-quarter delivery update in early July, which is expected to show a decline for the second straight quarter. Analysts have adjusted their estimates for TSLA deliveries downward due to concerns over consumer demand and intense competition in China. In January, the company cautioned that delivery growth in [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":41,"featured_media":57806,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[32700,34145,34427,34426,32139,34429,34424,34428,4754,34425,34423],"class_list":["post-59513","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-000-vehicles","tag-34145","tag-810-vehicles-in-the-first-quarter","tag-delivered-386","tag-inc-tsla","tag-notably-lower","tag-noted","tag-revised-his-deliveries-forecast-to-415","tag-tesla","tag-unveil-its-long-promised-robotaxi-on-august-8","tag-wrongful-death-lawsuits"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Long-Term Investors Should Eye TSLA&#039;s Robotaxi Potential - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"description\" content=\"Elon Musk recently announced that Tesla (TSLA) will unveil its Robotaxi on August 8. 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(TSLA)","notably lower","noted","revised his deliveries forecast to 415","tesla","unveil its long-promised Robotaxi on August 8","wrongful death lawsuits"],"articleSection":["General"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.ino.com\/blog\/2024\/07\/why-long-term-investors-should-eye-tslas-robotaxi-potential\/","url":"https:\/\/www.ino.com\/blog\/2024\/07\/why-long-term-investors-should-eye-tslas-robotaxi-potential\/","name":"Why Long-Term Investors Should Eye TSLA's Robotaxi Potential - INO.com Trader&#039;s Blog","isPartOf":{"@id":"https:\/\/www.ino.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.ino.com\/blog\/2024\/07\/why-long-term-investors-should-eye-tslas-robotaxi-potential\/#primaryimage"},"image":{"@id":"https:\/\/www.ino.com\/blog\/2024\/07\/why-long-term-investors-should-eye-tslas-robotaxi-potential\/#primaryimage"},"thumbnailUrl":"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/10\/stockstowatch.jpg","datePublished":"2024-07-02T10:00:05+00:00","dateModified":"2024-08-19T13:03:36+00:00","description":"Elon Musk recently announced that Tesla (TSLA) will unveil its Robotaxi on August 8. Several analysts indicate a shift in investor focus from deliveries and financial results for the second quarter to the company\u2019s long-term projects, including the Robotaxi. Let\u2019s evaluate the potential benefits and risks for long-term investors. 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