On Wednesday, investors and analysts will have the opportunity to question CEO Elon Musk about his robotaxi ambitions as Tesla announces its quarterly results. The automaker is expected to report a decline in third-quarter profits, impacted by significant incentives aimed at attracting electric vehicle buyers. However, much of the focus will likely be on Tesla’s long-term prospects, including the long-awaited robotaxi initiative and the company’s emerging AI ventures, such as the newly established X division.
The unveiling of a self-driving taxi, or robotaxi, that Musk announced last week was a significant milestone for the company. Still, investors will want to know how far along the technology is and if it can deliver on the promise of a $5 trillion market. They also will be looking for details on the company’s rate-of-change on its full self-driving software, or FSD, and a strategy for how it will compete with established rideshare companies such as Uber and Lyft.
During the robotaxi event, delayed from Aug. 8, Tesla showed off a prototype of a black-and-white robot named Optimus. This robot can sort objects and stand on one leg while gliding like a cheetah. Investors were eager to hear more about the robotaxi, but Musk only offered a short presentation. The company will release a more detailed product description and cost on Oct. 10.
But despite the excitement over the potential of the self-driving taxi, many analysts and investors still need to be convinced about its ability to succeed. For example, Morgan Stanley analyst Adam Spiegel says the “We, Robot” event lacked data regarding improvements to Tesla’s FSD and an understanding of how the company would compete with rideshare rivals. He argues that if the robotaxi is not a game changer, the company will struggle to attract capital and may even need to seek mergers or partnerships.
Investors are also keen to understand whether Tesla can build an efficient and profitable robotaxi business that will compete with Waymo and Zoox, which are making huge bets on autonomous vehicles. Moreover, they will want to know how much it will cost to produce the vehicle and how quickly the company can ramp up production to meet demand.
The big question, however, is whether the robotaxi will be a credible competitor to Uber and Lyft, especially given that these traditional carmakers have more experience in manufacturing and selling vehicles. It will also be crucial to understand how the company plans to address regulatory hurdles, which could hold up production and stifle its growth.
The event will be a key test for Musk to demonstrate that his vision of a future powered by artificial intelligence and self-driving cars is not merely a pipe dream but an achievable reality. But for that to happen, the world will need to see a working model on the road in a few years. Until then, Tesla’s shares will likely struggle to rise above the $140 mark.
