Tesla New Projects Stir Up Debate Among Investors

It’s no secret that Tesla is one of the most popular companies in the world with its shares being a part of diversified portfolios. While Tesla’s share prices have jumped in the last 5 years, its performance since the beginning of 2024 has not followed that path, recording losses while the company tries to adjust to global financial challenges.

Is Tesla in trouble? And how did the “We, Robot” event influence its share price? By reading this article, you will have the opportunity to read some valuable insights that may help you understand the challenges for the US company.

Cybercab: Tesla Present Driverless Robotaxis But Fails To Impress

On October 11th, Tesla’s CEO Elon Musk presented one of the company’s most anticipated projects called “Cybercab.” Musk said the company would start building the fully autonomous Cybercab in the next two years, offering it at a price of less than $30,000. The presentation included the reveal of a new Robovan. According to the published specs, it can carry up to 20 people as transport goods, driving itself without human supervision.

The lack of further details regarding safety features of the Full Self Driving system (FSD) used in both vehicles watered down any enthusiasm with some noting that Tesla’s CEO is keen on making promises that he can’t keep.

Tesla’s leadership took things one step further by presenting an android named “Optimus”, a humanoid robot coming straight from science fiction movies. The Optimus robots talked, served drinks and played games with the event’s guests. Elon Musk even asked on X (formerly known as Twitter) if anyone would want to own such a unit. Nevertheless, media reports published after the event said that the robots were supported by human intervention and were not fully autonomous.

Analysts Not Convinced By Tesla’s Cybercab And Robovan

Tesla Inc. shares closed at $238.77 on Thursday October 10th. On Friday October 11th, the stock opened at $220.13, fell to a low of $214.38 during early trading, and finished the day at $217.80.

Morgan Stanley analyst Adam Jonas noted that “Tesla’s highly anticipated “We, Robot” event demonstrated its Cybercab as expected but overall disappointed expectations on a number of areas, namely a lack of data regarding rate-of-change on FSD/tech, ride-share economics and go-to-market strategy.”

JP Morgan economists followed Morgan Stanley’s example mentioning that the long-awaited event lacked in detail, including in regards the sensor suite, the path to regulatory approval, or other key aspects of the business plan.

Canaccord analysts were a bit more optimistic regarding Tesla’s future as they suggested that its plans may pay off but added that “details were minimal. And we doubt the timing of it all. All. By a lot. Not only is Robotaxi unlikely by 2026 in our view, but we are not totally convinced that Tesla's camera-only, end-to-end neural network approach is the right one — at least not for a long while. To justify the back-end cost of Tesla's system and reach cost parity with competing solutions, investors need to see millions of customers opt-in for FSD and Robotaxi."

Focus On Tesla Q3 2024 Performance Report

Tesla will post its financial results for the third quarter of 2024 after market close on Wednesday October 23rd 2024. As the latest event and the limited flow of information did not steal the hearts of investors and traders, analysts will focus on the facts based on sales figures, revenue and profits.

Tesla has already published its delivery figures for the third quarter, indicating that it delivered 462,890 vehicles, a 6.4% increase on an annualised basis. Some economists suggest that Tesla’s delivery growth may have been supported by its recovery observed in the Chinese market in which the US company has faced increased competition by local car makers. It should be noted that Tesla has lowered prices in some of its models while it has offered zero interest loans in China to make its cars more attractive to potential buyers.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.