Tesla's robotaxi event on 10 October is crucial for Elon Musk, as he must convince investors of Tesla's ability to lead innovation beyond being a carmaker. While Tesla’s operating figures have improved, its stock remains nearly 40% below its 2021 high. The stock’s well-being now hinges on its ability to innovate, given its much higher valuation compared to traditional automakers.
Tesla once dominated the electric vehicle (EV) market, but rivals like Ford, General Motors, Volkswagen, and BYD have closed the gap. Other companies like Waymo and Cruise are also leading in autonomous driving, a sector once seen as Tesla’s new playground. Tesla relies solely on optical cameras and artificial intelligence (AI) for its self-driving technology, while rival companies use a mix of sensors; Waymo has logged over 22m driverless miles with low accident rates, while Tesla’s “Full Self-Driving” still needs human intervention about every 100 miles.
On Robotaxi Day, investors expect Musk to unveil Tesla’s self-driving taxi technology and potentially set a timeline for a 2026 commercial launch. There's also anticipation for the Model 2, a lower-priced EV that could broaden Tesla's market. This could be crucial for Tesla’s stock price, especially since the company’s US sales dropped nearly 10% year-over-year through August, even as overall EV sales grew.
Tesla's business model extends beyond cars to include energy storage and AI, though these areas have yet to mature. Tesla’s energy division is small but could match the automotive business's profitability by 2030. Investors are watching to see if Tesla can maintain its high valuation and share price of around $250, and regaining investor confidence will depend on Elon Musk’s ability to prove that Tesla remains a hotbed of innovation and can deliver on its ambitious promises.
Find your flow: four principles for trading in the zone
Learn about the four trading principles of preparation, psychology, strategy, and intuition, and gain key trading insights from some of the world's top investors.
Get this free report
