Tesla (TSLA) stock has battled back this year and heading into Thursday’s robotaxi event, it is approaching a traditional buy point even as investors appear to be treading carefully prior to the big announcement.
Robotaxi event invitations were officially sent to Tesla investors on Sept. 25 and while most of the details are still under wraps, Chief Executive Elon Musk is setting sky-high expectations for the event.
“This will be one for the history books,” Musk posted to X on Sept. 25, along with a photo of the event announcement. “We, Robot,” the banner reads. “10.10 Los Angeles.”
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Tesla’s Robotaxi Is Delayed. Will It Make A Difference For Tesla Stock?
On Sept. 11, Musk wrote on X that in his opinion the robotaxi reveal will be the most significant moment for Tesla since the EV company unveiled the Model 3 nearly nine years ago.
Tesla Stock Rebounds As The Robotaxi Approaches; But What About Waymo
“We think the stakes are high and there is more risk to the downside than upside given the stock’s recent run-up and likelihood that the event could disappoint,” CFRA analyst Garrett Nelson wrote on Oct.2.
“We also note the stock price run-up and then ‘sell the news’ pattern of major Tesla events historically. Specifically, we are looking for more visibility regarding intermediate-term earnings growth,” Nelson added.
Tesla stock dropped 3% to 233.90 during market action on Thursday after falling 1.4% on Wednesday, trading just below its 21-day line. TSLA shares are down 3.6% on the week going into Thursday trade.
The stock has been climbing above its 50-day moving average to within around 11% of its July high.
Meanwhile, on Oct. 2, Tesla reported global third-quarter deliveries increased 6% compared to a year ago, hitting the third best quarterly total ever, as the EV giant saw vehicle unit sales return to growth for the first time in 2024.
Tesla is also clearly looking to ramp up sales in the fourth quarter by offering new de facto price cuts. It’s now opening up non-Foundation Series Cybertrucks to order. The dual-motor Cybertruck is now available for $79,990, down from $100,000 for the Foundation Series variant. The company last week also began offering $2,500 discounts in the U.S. on many Model 3 and Model Y inventory vehicles. This week, Tesla has cut the price of the base Model 3 Standard Range by 3.6% in France, 5.75% in the Netherlands and 5.9% in Germany.
As analysts await the robotaxi event, updates around Tesla’s strategy, new products and EV demand, the top question for investors is always, when is it a good time to buy or sell Tesla stock.
Tesla Stock: Location And Viewing
Tesla has confirmed the robotaxi reveal will take place in Los Angeles at the Warner Bros. studio in Burbank. Remarks and the presentation are set to begin at 7 PM Pacific Standard Time on Thursday.
Tesla is telling attendees there will be security screenings at the event and that no backpacks or “large bags” are allowed. The EV giant is also encouraging people in attendance to wear “closed-toe shows.”
The event will be broadcast on Tesla’s X social media channel. The EV giant will also be hosting watch parties at Tesla stores across North America.
On Sept. 10, Tesla announced retail investors could sign up for a chance to attend the event in person.
“Join us for We, Robot — our official unveiling of the future of autonomy,” the invite proclaims.
The Robotaxi And Maybe Something Else?
Musk previously planned to unveil the robotaxi on Aug. 8, but pushed the event out to “make some important changes.” Musk also hinted on the Q2 earnings call that there could also potentially be other product announcements on Oct. 10.
“Moving it back a few months, allowed us to improve the robotaxi, as well as add in a couple other things for the product unveil,” Musk said on the July 23 earnings call.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, on Wednesday said the robotaxi event will be a “seminal and historical day for Musk and Tesla and marks a new chapter of growth around autonomous,” expecting “game changing” autonomous technology.
Ives has said he expects Musk and Tesla to provide updates during the robotaxi event on full self-driving, known as FSD, and artificial intelligence (AI).
“We expect to hear many updates and more granularity from Tesla and Musk on its robotaxi rumored to be named the “Cybercab”, its next-gen platform, breakthroughs in FSD & AI with robotaxi rolling out phases of the strategy within the next year,” Ives wrote in late September.
Adam Jonas, Morgan Stanley’s high-profile auto analyst and a TSLA bull, wrote on Oct. 2 he expects the Oct. 10 robotaxi event will include a demonstration of the latest iteration of full self-driving, or FSD, which would be version 12.5 or later, as well as a demonstration of a fully-autonomous robotaxi, or “cyber-cab” driving on a a closed course.
Jonas forecasts potential initial commercial introduction of the cyber-cab could be late 2025 or 2026.
Jonas has stressed that Tesla currently has a permit for autonomous vehicle testing “with a driver” but does not possess a permit for autonomous vehicle testing or deployment without a driver.
On Musk’s hints at other products, Jonas wrote in September: “Could we see an electric plane? A boat? The latest gen Optimus robot flipping burgers at a Tesla Diner? We’re not really sure.”
“We remind investors that such events aim to achieve multiple purposes including recruiting, marketing and consumer education,” the analyst added.
Cathie Wood’s Robotaxi Projections
Meanwhile, Cathie Wood and her Ark Invest firm on June 12 updated its Tesla stock price target to 2,600 by 2029. Wood has long been bullish on Tesla’s autonomy push and robotaxi aims. Ark Invest estimates that around 90% of Tesla’s enterprise value and earnings will be attributed to the robotaxi business in 2029.
Without a robotaxi network and business, Ark Invest says its TSLA price target would be around $350 per share, according to the report.
“We remain confident that the service will launch within the next five years,” Ark Invest said.
Tesla: Second-Quarter Earnings
The EV giant’s second-quarter earnings sank compared to a year ago. On July 23, Tesla reported that Q2 earnings fell 43% to 52 cents per share. Meanwhile, quarterly revenue totaled $25.5 billion, up 2% vs. the year-earlier quarter. Analysts had predicted Tesla would report earnings of 61 cents a share with sales sliding to $24.54 billion, according to FactSet.
Tesla announced it “achieved record quarterly revenues despite a difficult operating environment.” However, Tesla’s gross margins fell 23 basis points to 18%. Auto gross margins, excluding regulatory credits and leases, came in at 15.1%, inline with analyst expectations, according to FactSet.
This comes after Musk on the Q1 earnings call said that “if somebody doesn’t believe Tesla is going to solve autonomy” that they “should not be an investor in the company.” The Tesla chief doubled down on this line on the second-quarter conference call.
Low Cost Vehicle Upcoming?
Tesla has said plans for new vehicles, including affordable models, remain on track to start production in the first half of 2025. That suggests that mass production won’t start until late 2025 at the earliest.
There were media reports going into Q2 that Tesla had decided to scrap its next-generation Model 2, a $25,000 vehicle.
Meanwhile, Tesla also said in its July earnings report that its vehicle volume growth rate in 2024 “may be notably lower than the growth rate” last year. The EV giant added that growth in its energy storage business should outpace its automotive segment.
Musk in the Q1 earnings call said he expected 2024 vehicle deliveries to grow compared to 2023. The EV giant saw deliveries in 2023 hit a record 1.81 million.
Tesla and Musk would have to see a record-setting Q4 for them to reach the 1.8 million number.
Musk And Tesla Control
Tesla shareholders also recently voted in favor of giving Musk his 2018 $56 billion pay package and reincorporating the company in Texas, moving it from Delaware.
Musk has hinted throughout the year he feels he needs more TSLA shares and voting power before making Tesla a “leader in AI & robotics.”
In January, Musk posted on X that he’s “uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control.” The chief executive added that he wants enough shares to be “influential but not so much that I can’t be overturned.”
Musk currently has a nearly 13% stake in Tesla. Prior to selling TSLA shares to purchase Twitter, now X, for $44 billion in late 2022, Musk owned around 22% of Tesla.
Elon Musk, Layoffs And Superchargers
With Musk focused on full self-driving, FSD, and artificial intelligence, he has also been shaking up Tesla, letting top executives go and announcing layoffs, this year.
Musk decided to let two top executives go while also cutting the EV company’s entire supercharger team, according to reports on April 30.
In late April, Musk dismissed Rebecca Tinucci, senior director of Tesla’s supercharger efforts, and Daniel Ho, head of the new vehicles program. The Tesla CEO also reportedly cut teams under Tinucci and Ho along with laying off its public policy employees and the entire staff working on Tesla superchargers.
However, since then he appears to have since started hiring back employees.
Musk also decided in April to lay off more than 10% of Tesla’s global workforce, an effort to prepare for the “next phase of growth.” Drew Baglino, who served as senior vice president of powertrain and energy, and Rohan Patel, vice president of public policy and business development, both departed Tesla around the time of those cuts.
Meanwhile, reports emerged on Aug. 20, that Uber (UBER) has hired Tinucci to oversee the company’s shift to electric vehicles. Tinucci will start her new position on Sept. 16.
Competition between Tesla and Uber appears to be heating up with the EV giant scheduled to unveil its robotaxi on Oct. 10, and claims it is currently working on its own integrated ride-hailing service.
Tesla EVs In Regulators’ Sights
The EV giant also faces mounting pressure from regulators in 2024. A Reuters investigation found the EV giant has known of faulty suspension and steering parts across its model lineup going back at least seven years, but often blamed drivers when those parts failed.
Norway’s traffic safety regulator in late 2023 confirmed it’s been investigating suspension failures in Model S and X vehicles since September 2022. Sweden also announced on December 22, 2023 that it’s also looking into similar issues.
This comes after a National Highway Traffic Safety Administration (NHTSA) investigation spurred Tesla to perform an over-the-air software “recall” on more than 2 million vehicles after determining that the Autopilot is prone to misuse after reviewing 1,000 accidents.
The NHTSA recently closed its Autopilot safety probe. However it has opened a new investigation into whether the over-the-air update was sufficient.
Is Tesla Stock A Buy?
Tesla stock fell 3.7% to 240.83 on Monday, slightly below the 21-day moving average, after dropping 4% last week with Q3 deliveries in line, but below some whisper numbers. Shares found support around the 21-day line, rising 3.9% on Friday.
Tesla stock now has a handle on a daily and weekly chart, giving it a 264.86 cup-with-handle buy point, according to MarketSurge chart analysis. The 250 area offers an early entry. But buying before the robotaxi event could be highly risky.
On Sept. 5, shares popped above their 50-day moving average, buoyed by robust China sales and the EV giant’s full self-driving rollout plans.
TSLA shares jumped more than 22% in September after declining 7.7% in August. Tesla stock has battled back in 2024 and is now down just 3% on the year, after rebounding about 90% from a late-April low.
Tesla has a busy October. Third-quarter deliveries are done but the EV giant has the robotaxi event on Oct. 10 and then Q3 earnings on Oct. 23.
Wall Street consensus also has 2024 Tesla earnings firmly below last year’s level. That signals another year of earnings declines for this growth stock. Analysts currently expect Tesla earnings per share of just $2.22 in 2024, according to FactSet. That would be about a 30% decline vs. $3.12 in 2023.
Tesla stock ranks fourth in the 35-member IBD Auto Manufacturers industry group. The stock has a 54 Composite Rating out of a best-possible 99. Shares also have a 45 Relative Strength Rating and a 57 EPS Rating.
Almost single-handedly, Elon Musk has turned the auto industry on its head. He has essentially forced it to get aboard the electric-vehicle train. Tesla has been a monster stock over much of its history, especially during its stratospheric run from mid-2019 to late 2021.
Tesla stock is approaching a cup-with-handle buy point, but there is risk to the downside if the robotaxi event disappoints.
Please follow Kit Norton on X @KitNorton for more coverage.
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