Tesla Robotaxi Event could be a key driver for TSLA stock. Find out what to expect, potential impact on Tesla’s valuation, and market expectations.Tesla (NASDAQ:TSLA) is set to hold its highly anticipated “We, Robot” robotaxi event on October 10 in Los Angeles. CEO Elon Musk has long emphasized the critical role of software, particularly autonomous driving, in Tesla’s future valuation. With this event, the company aims to showcase its progress in autonomous technology, which is key to its ambitions in the robotaxi market.

The event was initially slated for August, but Tesla delayed it to make “important changes” and add a “couple of other things” to the lineup. Now, as the robotaxi event draws near, all eyes are on what Tesla will unveil and whether it will be a catalyst for the stock.

Robotaxi Event: A Game-Changer for TSLA Stock?

While some analysts consider the event a “make or break” moment for Tesla, it is arguably one of the most critical in the company’s history. Elon Musk has spoken about robotaxis for years, famously predicting a million on the roads by 2020 — a milestone that remains unachieved. This adds pressure for Tesla to finally demonstrate a viable product, especially as competition in the autonomous vehicle (AV) space heats up.

Tesla stock has seen a rollercoaster ride in 2024, briefly turning positive on a year-to-date basis before struggling to sustain gains. Despite a rally that has seen shares soar 76% from April lows, TSLA has struggled with delivering consistent momentum, partly due to mixed market sentiment on Tesla’s AV initiatives.

Tesla’s Deliveries and Margins: A Challenge for Growth

TSLA faces hurdles in terms of both delivery growth and margins. Although Elon Musk once set ambitious goals like 20 million annual deliveries by 2030, the company has quietly stepped back from these projections. Deliveries in the first half of 2024 actually fell year-over-year, and Q3 showed only a modest 6% increase. Should Tesla fail to deliver year-over-year growth in 2024, it would mark the first time in its history that annual deliveries declined.

Price cuts to spur sales have significantly impacted Tesla’s once-industry-leading margins. While the price reductions have boosted sales, they have come at the expense of profitability, raising the stakes for the robotaxi unveil to provide a new source of growth.

What to Expect at Tesla’s “We, Robot” Event

Details about what Tesla will reveal on October 10 are scarce, but there’s much speculation. Given the “We, Robot” title, expectations are that the event will go beyond robotaxis. Some analysts believe Tesla could unveil the “Cybercab,” a vehicle specifically designed for ride-hailing, and possibly offer demo rides to showcase its capabilities.

Others anticipate that Tesla may also announce a low-cost model — often referred to as “Model 2” — which has been teased by Musk for some time. If this low-cost model turns out to be a simplified version of the existing Model 3, it could disappoint investors expecting something groundbreaking.

Gene Munster, a veteran tech analyst and Managing Partner at Deepwater Asset Management, believes Tesla could unveil up to three vehicles at the event, including a “Cybervan.” However, he also tempers expectations by noting that these vehicles are likely far from production, making their immediate impact on Tesla’s earnings minimal.

Munster also speculates that Tesla will update attendees on the Optimus humanoid robot, a project Musk has touted as potentially adding $25 trillion to the company’s market cap. However, any commercial availability of the Optimus robot is expected to be at least five years away.

Should You Buy TSLA Stock Before the Robotaxi Event?

The Tesla Robotaxi Event remains a wild card for the stock, given the range of possible announcements and market reactions. While the event may lead to a surge in investor optimism, none of the expected reveals — aside from a low-cost model — are anticipated to significantly influence Tesla’s earnings in the near term.

Furthermore, the AV industry faces challenges beyond just technology. The business models for autonomous ride-hailing remain unclear, and profits are still elusive for major players like Alphabet’s (NASDAQ:GOOGL) Waymo and General Motors’ (NYSE:GM) Cruise division. Tesla would need to outline a clear strategy for its robotaxi business, including potential partnerships with ride-hailing firms like Uber (NYSE:UBER), to convince investors of its viability.

While the Tesla Robotaxi Event has the potential to be a pivotal moment, it is unlikely to change the company’s earnings outlook in the immediate future. However, Tesla’s strong history of innovation and diverse product offerings could still make it a compelling investment for those willing to weather short-term volatility.

Bottom Line: What Lies Ahead for Tesla?

The Tesla Robotaxi Event is poised to bring a lot of attention to TSLA stock, and while it may not significantly shift the company’s short-term financials, it reaffirms Tesla’s focus on future technologies. For long-term investors, Tesla’s event could further solidify its role as a leader in innovation. However, with its core automotive business facing challenges in delivery and margins, Tesla will need to execute flawlessly on its robotaxi vision and beyond to keep the stock moving higher.

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