Tesla's Robotaxi Unveiling Sparks Investor Excitement and Market Surge

Tesla stock surges amid optimism on Q3 earnings, 'robotaxi day'

The recent shift in sentiment around Tesla comes in part from the company's status as an AI darling for several high-profile tech bulls, which has helped drive anticipation for the long-awaited "robotaxi day" on Oct. 10. That's when Tesla is expected to provide updates on what it calls its "full self-driving" software at the event, as well as a demonstration of its planned autonomous "cyber-cab." To remain profitable, however, Tesla will need to sell cars to use that software. While news on that front has been very mixed in 2024, Barclays analyst Dan Levy predicts quarterly deliveries will come in around 470,000 vehicles, up 8% from the same quarter last year and beating Wall Street's expectations. For investors, it was a welcome contrast to last quarter, when deliveries fell 5% year-over-year. Those numbers did beat the Street's expectations, briefly pushing the stock higher. A few weeks later, however, a disastrous earnings call erased those gains as the stock plunged 12%, its worst single-day performance since 2021. Analysts had wanted to hear about declining revenues and margins. Instead, they got a long-term pitch about next-gen EVs and AI investments from Musk. Wedbush Securites' Dan Ives, a noted Tesla bull, called those earnings a "train wreck." Baird managing director Ted Mortonson told Fortune he thought Musk seemed defensive. It appears the world's richest man might be in a better mood for the company's Q3 call on Wednesday. The stock has recovered to trade just short of the $250 mark, down only slightly from its 52-week high of $271. Its performance still lags well behind the 21% year-to-date gains of the S&P 500, however, and the recent rounds of poor earnings results have many, including Fortune's Shawn Tully, wondering whether the stock is overvalued. This year has also been filled with reports about Tesla's declining market share in the U.S., China, and Europe, though Levy's note said increased deliveries in China this quarter would make up for weak EV sales generally in the European Union. As a first mover, it's only natural for Tesla's overall market share to decrease as the EV space grows. Nonetheless, a brutal price war that Musk himself launched has emboldened Chinese manufactures like BYD, which is famously backed by Warren Buffett's Berkshire Hathaway, to go on the offensive. It remains to be seen how deteriorating trade relations between the U.S. and China will affect Tesla's business. On Monday, the Biden administration announced the Commerce Department would propose a ban on Chinese-developed software from all internet-connected cars in the U.S. The move comes after Biden already announced 100 percent tariffs on Chinese electric vehicles in May. Tesla benefits from producing and selling vehicles in both of the world's biggest markets, but it could still suffer collateral damage. Recently, for example, the EU hit Musk's made-in-China cars with an extra 9% import duty, though other manufactures such as Volvo Car AB parent Geely and BYD were hit much harder.

Goldman analyst revisits Tesla stock price target ahead of key events

Tesla shares nudged higher in early Monday trading, extending a solid September gain, after a top Wall Street analyst revisited his rating an price target on the group ahead of two key events over the coming weeks. Tesla (TSLA) , which will publish its third quarter delivery figures next week, and has fallen around 9.5% since delaying its robotaxi unveiling, originally slated for early August, around ten weeks ago. CEO Elon Musk said the delay was needed in order to "make some important changes that I think would improve the vehicle." Musk added that he would be "shocked" if the first unsupervised rides couldn't take place by the end of next year. The new reveal, which is set for October 10 at a Warner Bros Discovery WBD studio lot in Los Angeles, will mark a key pivot point for the automaker as it looks to evolve away from its traditional carmaking roots to focus on autonomous driving technologies powered in part by its Dojo AI supercomputer. Musk, who has staked the group's future on its ability to "solve" autonomous driving, also wants to roll out its Full Self-Driving advanced driver-assistance software will be available in Europe and China next year after a series of regulatory and technological delays. Robotaxi timeline in focus Musk told Tesla employees earlier this year that it would be "mandatory" for its North American operations to "install and activate" Full Self-Driving software in new Tesla vehicles, and to "take customers on a short test ride before handing over the car." "Almost no one actually realizes how well (supervised) FSD works," Musk wrote in the memo. "I know this will slow down the delivery process, but it is nonetheless a hard requirement." Goldman Sachs analyst Mark Delaney, who reiterated his 'neutral' rating and $230 price target heading into the October event, said the details Musk provides during the robotaxi reveal will be crucial. Related: New study exposes huge flaw with Tesla Autopilot and its copycats "The timeline to begin commercial operations in robotaxis (including technology readiness and operational/regulatory/logistical considerations) and the business outlook (including how Tesla's cost structure may compare to competitors) will be key areas of focus for investors," Delaney said in a note published Monday. He also suggested that news of a new low-cost Tesla model, a release that investors have long encouraged Musk to pursue, could be on the table at next month's LA event. Delivery figures on deck "Whether Tesla provides more details or unveils the new lower-cost model at the 10/10 event has also been a frequent topic in our investor discussions," he added. Tesla, which is set to publish its third quarter earnings on October 16, is also likely to release its overall vehicle delivery tally for the three months ending in September sometime early next week. Related: Analysts weigh in on Ford, praise Tesla The group's China sales, which have been floundering for much of the year, had a solid rebound in August, according to official figures, but activity in Europe remains notably depressed, with sales down 43.2% last month, according to European Automobile Manufacturers' Association data. More Tesla: Goldman's Delaney pegs the third quarter tally around around 460,000 units, up around 4% from the prior three months and around 6% higher when compared to the same period last year. Early estimates suggest Tesla will post earnings of 60 cents per share, down 9% from the same period last year, on revenues of around $25.57 billion. Tesla shares were marked 1.2% higher in premarket trading to indicate an opening bell price of $241.11 each. Related: Veteran fund manager sees world of pain coming for stocks