August 8 - A Robotaxi Date of Significance? Or a Date of Triviality?
Tesla CEO Elon Musk recently posted on X that his company will reveal a robotaxi on August 8. In my opinion, the unveiling of an actual, working, Level 5 autonomous vehicle by Tesla on that date is dubious at best. As The Verge recently reported, Musk’s claims that autonomous vehicles are close to reality “are now part of Tesla lore.”
According to Zacks Equity Research, Musk told shareholders in 2015 that Tesla vehicles would be fully autonomous within three years. In 2019, Tesla announced plans to operate a robotaxi business by 2020. Musk even stated that Tesla vehicle owners could generate income by allowing their autonomous vehicles to be used as robotaxis in the “Tesla network.”
Why would Musk reveal an autonomous vehicle if there will be no working autonomous car to showcase on August 8? The answer might be to respond to a recent Reuters report highlighting that Tesla had abandoned one of its primary missions: to produce “a low-cost family car.” This car, promised to investors, was expected to have a starting price of $25,000 with substantial production volume.
The entry-level Tesla was critical for many investors anticipating substantial stock price appreciation. Despite the hype surrounding Tesla being included in the Magnificent 7 of technology stocks, Tesla shares have been under tremendous pressure for over two years, falling from over $400 in November 2021 to $171 today.
Autonomy is the main driver of Tesla’s market value - Elon Musk
For Musk, one way to get investors energized about Tesla shares again is to make them believe a new, autonomous driving, robotaxi business is imminent. For investors, this new robotaxi business would be as significant to Tesla as AWS is to Amazon today.
But what if the August 8 event is just more “Musk robotaxi lore,” where a robotaxi-looking vehicle is revealed, but it’s far from being capable of actual, Level 5 autonomy? How might this impact the Tesla stock price? The reaction from investors could be severe.
Less than a year ago, Musk himself said, “autonomy is the main driver of Tesla’s market value,” a recognition then that Tesla is essentially an automaker, not a technology company commanding a technology company valuation. Thus, any increased valuation for Tesla must come from some new capability such as an autonomous robotaxi business. Thus, August 8 could be a make or break moment for the future of Tesla’s future valuation.
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TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.