So much for Tesla’s long-awaited robotaxi event.
It was, said Morgan Stanley analyst Adam Jonas, arguably the “most highly anticipated product unveil in Tesla’s history”, but investors and analysts were underwhelmed by a launch that was low on details and specifics. The title of Jonas’s client note – “That’s it?” – captured the wider mood, as the stock quickly lost a tenth of its value.
Should investors have been surprised? In 2015, Elon Musk predicted fully autonomous cars by 2018. In 2019, he said a million robotaxis would be operational by 2020. That timeline was extended to 2023.
Now, Musk expects Tesla’s Cybercab to be in production “before 2027″. And yet, many investors clearly were surprised, as evidenced by Tesla shares sinking and shares in ride-sharing firms Uber and Lyft jumping.
JPMorgan’s Ryan Brinkman notes Tesla shares had rallied 68 per cent since April, even as estimates for 2024 and 2025 car sales, earnings, and free cash flow continued to sink.
The “obvious” explanation for big stock gains in the face of deteriorating earnings was “investor anticipation for the robotaxi day”, noted Brinkman.
Now, investor attention must return to more mundane realities, with Tesla reporting quarterly earnings on Wednesday. As the dust settles, Tesla investors are left to confront a familiar challenge: balancing Musk’s ambitious promises for tomorrow with the realities of the company’s present performance.
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